ORAL ANSWERS TO QUESTIONS

WALES

The Secretary of State was asked—

Electricity Transmission Projects

Jonathan Edwards: What discussions he has had with National Grid on future electricity transmission projects in Wales.

Stephen Crabb: The Wales Office takes a close interest in National Grid’s electricity transmission projects in Wales, and I will meet National Grid later this month to discuss them in further detail.

Jonathan Edwards: Western Power Distribution is consulting on routes for electricity poles linking TAN 8 area G in north Carmarthenshire to the national grid in the south of the county. Local people feel strongly that any electric cables should be underground to preserve the beauty of the Tywi valley, and are concerned that the consultation period is far too short. Will the Minister impress upon the Department of Energy and Climate Change and National Grid that such transmission projects in open Welsh countryside should be underground, and at the very least that the WPD consultation should be extended into the autumn?

Stephen Crabb: These transmission projects are best dealt with case by case. The problem with a default position of saying they should always be underground is that it adds huge cost and complexity, making projects unaffordable. We want to keep the lights on in Wales, so we need infrastructure that is affordable, but I will certainly look into the specific point the hon. Gentleman raises about the consultation period with Western Power.

Glyn Davies: National Grid has proposed to construct a 40 km 400 kV line through my constituency, but the local economy depends to a significant extent on its physical beauty and tourism. Will the Secretary of State press National Grid to ensure that if it does go ahead with this monstrous proposal it will be placed entirely underground?

Stephen Crabb: National Grid has already given a commitment that where possible it will use underground cabling projects in my hon. Friend’s constituency, but in my discussion with National Grid the week after next I will certainly raise the point again and come back to my hon. Friend with a fuller answer.

Stephen Doughty: On electricity generation, does the Minister share my concern about the stance of Plaid Cymru and its leader Leanne Wood on new nuclear, and Wylfa B in particular, despite the £10 billion of investment and the 6,000 jobs it could bring to Ynys Môn and the wider Welsh economy?

Stephen Crabb: I share the hon. Gentleman’s concern about many of the positions of the Plaid Cymru leader in Wales, not least on nuclear. We still do not quite know the party’s position on investment in nuclear power, but we know that project would be a huge boost to the economy of north Wales.

James Gray: Has the Minister noticed some of the very fine print in the Energy Bill allowing pylons, which are already large enough, broadly speaking to be doubled in size without extra planning permission? Does he agree that that would wreck the landscape of Wales, as of England, and we ought to be extraordinarily cautious about it?

Stephen Crabb: I agree with my hon. Friend that we have some unique and outstanding areas of beauty in Wales that need to be protected where possible, but, as I said in answer to an earlier question, these projects are best dealt with case by case basis, balancing environmental considerations with those of affordability and, of course, the views of the local communities, which should be at the heart of all planning applications.

Aviation Sector

Laura Sandys: What recent assessment he has made of the role and importance of the aviation sector in Wales.

Karen Lumley: What recent assessment he has made of the role and importance of the aviation sector in Wales.

Stephen Mosley: What recent assessment he has made of the role and importance of the aviation sector in Wales.

David Jones: The aviation sector is vital to the Welsh economy, and I was pleased to see so many Welsh businesses represented at the Paris air show last month.

Laura Sandys: Does the Secretary of State agree that the UK’s overall aviation strategy is there to support more jobs, exciting top-end engineering and ensuring we have a strong technology base in this country?

David Jones: Yes, the United Kingdom aerospace industry is the second largest in the world, and is by far the largest in Europe, and it contributes some £24 billion per annum to the UK economy. The Government have set out our strategic vision for the UK’s civil aerospace sector in the aerospace industrial strategy, which includes Government investment of £2 billion over the next seven years.

Karen Lumley: Does my right hon. Friend think it is a good use of taxpayers’ money to buy Cardiff International airport?

David Jones: That is entirely a matter for the Welsh Assembly Government, who have purchased it at a cost of £52 million. Clearly Cardiff does need an international airport, and I very much hope it will develop under the Welsh Government’s tutelage.

Stephen Mosley: I am sure my right hon. Friend is aware of the new terminal being built at Chester Hawarden airport in the constituency of the hon. Member for Alyn and Deeside (Mark Tami), which will cater for small planes carrying up to 50 passengers. What benefits does my right hon. Friend foresee for north-east Wales, and for Chester as well, from having direct flights to Cardiff, across the UK, and to continental Europe?

David Jones: I was very pleased to see that a service is being developed at Hawarden airport. It will clearly be extremely important to north-east Wales and the two enterprise zones at Deeside and Wirral Waters.

Mark Tami: At the last Welsh questions, the Secretary of State was asked whether he thought Airbus jobs would be safer or not if the UK was outside the EU. He failed to answer that question. Will he answer it now?

David Jones: The issue of a referendum on Europe has, of course, yet to be determined. Consultation will take place with all sectors of industry, aviation included.

Madeleine Moon: Constituents have visited my surgery expressing concern at the potential closure of 71 Inspection and Repair Squadron at St Athan, with the loss of 75 highly skilled jobs in the aviation sector that are based at the station there. Will the Secretary of State talk to the Ministry of Defence to explain how the defence footprint, particularly in highly skilled aviation jobs in Wales, is shrinking? Will they make sure that that does not happen?

David Jones: I am, clearly, happy to raise the hon. Lady’s concerns with the MOD, but I would say that when I visited the British Airways maintenance centre at Cardiff airport only a few weeks ago I was impressed by the fact that a large number of workers there were former RAF employees.

Ian Lucas: Does the Secretary of State agree that membership of the European Union is an essential precondition of the continued success of the UK arm of Airbus?

David Jones: These issues fall to be considered in the debate about whether we should have a referendum on the European Union.

M4

Alun Cairns: What discussions he has had with (a) his ministerial colleagues and (b) Ministers in the Welsh Government on improvements to the M4 motorway.

Stephen Crabb: My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues here in London and with Welsh Ministers on improvements to the M4. I am clear that the M4 is the single most important piece of transport infrastructure for the Welsh economy, and we are absolutely committed to working with the Welsh Government to deliver the funding solution required for improving that motorway.

Alun Cairns: I am grateful to the Minister for his efforts in trying to deliver improvements to the network and the M4 around Newport. It is the gateway to the south Wales economy. What reassurance can he give me that the project will go ahead this time, because it was cancelled twice by the Labour party?

Stephen Crabb: I pay tribute to my hon. Friend’s campaigning, and the work of other Government Members, to see the improvements to the M4. He rightly points out that this project was shelved on several occasions by Wales Office Ministers. I do not want to pre-empt any announcement today, but I would like to give him every reason to be optimistic that we will get a successful outcome to the discussions with the Welsh Government on this issue.

Jessica Morden: Help to relieve the traffic nightmare around Newport is vital, but will the Minister assure my constituents that any resource given to the Welsh Government will be significant enough to help deal with the big impact that any new road will have on local communities and the environment?

Stephen Crabb: The hon. Lady is absolutely right to raise the technical challenges involved in a new relief road for the M4. She will have noted the Welsh Government announcement that they will shortly launch a consultation on the details of the scheme, which will provide her local community with every opportunity to express concerns and, we hope, get answers to their questions.

David Davies: I applaud the Minister for his determination to go ahead with this much-needed project, which has been blocked so many times by members of the Labour party in the Welsh Assembly. May I also urge him to ensure that it is linked to an announcement about the future of the Severn bridge, as motorists are struggling to pay the costs of it, just a few years before it is returned to the Government?

Stephen Crabb: I thank my hon. Friend for his question. As I said in answer to a previous question, I am not going to pre-empt any announcement today. I recognise the concerns of the Chairman and other members of the Select Committee about the high tolls on the Severn bridge, but we are not in a position today to make any comment on what lies beyond 2018, when the current concession comes to an end.

Spending Review

Albert Owen: What discussions he has had with the Chancellor of the Exchequer on the effect of the spending review on Wales.

Geraint Davies: What discussions he has had with the Chancellor of the Exchequer on the effect of the spending review on Wales.

David Jones: I have had a number of discussions with the Chancellor on the spending review. This Government are investing in Wales. The announcement of the £250-million new prison in north Wales will create much-needed jobs for the region and further boost economic growth.

Albert Owen: Missing from the spending review was real investment in Welsh ports and Welsh infrastructure to those ports. Wales has already lost out under this Government on ports, which are the gateways to Wales. They could regenerate sectors such as energy and, thus, make places such as Holyhead world leaders. When will this Secretary of State stand up for Welsh ports and make sure that we get a level playing field for this energy development, which includes marine, tidal, onshore wind, offshore wind and nuclear power, which Plaid Cymru does not support?

David Jones: I regularly visit ports across Wales and am well aware of the importance of Holyhead port to the economy. The hon. Gentleman is quite right that we need better connectivity with the ports, on which I am pressing my right hon. Friend the Secretary of State for Transport, and I am raising it with the Welsh Government.

Geraint Davies: The austerity audit published in the Financial Times found that the average working Welsh adult would lose £549 a year from the cuts compared with just £470 for an adult in England. Given that, why is the lion’s share of investment in infrastructure plans in London and the south-east, with no high-speed rail to Wales and no capital investment? Will he fight for a fair share of investment as well as an unfair share of cuts?

David Jones: I strongly refute the hon. Gentleman’s suggestion that Wales has somehow been short-changed: the investment in railways is very significant, with electrification right through to Swansea; in north Wales, we have a new prison; and we have new nuclear on Wylfa. The hon. Gentleman should also remember that as a result of our tax changes the average tax payer in Wales is some £750 per annum better off.

Guto Bebb: Will my right hon. Friend the Secretary of State join me in welcoming the decision to protect funding for S4C in the recent spending review?

David Jones: Absolutely. S4C is extremely important to the cultural life of Wales. It is the only Welsh language channel in the whole world and its value to Wales cannot be overstated.

Mark Williams: Further to that answer, will the Secretary of State reiterate the importance of that decision for the independent television production sector in Wales, which is critical for many of our local economies?

David Jones: My hon. Friend makes an extremely important point. The independent production sector in Wales is not only innovative but extremely important to the Welsh economy and I am sure it was very relieved by the Government’s announcement last week.

Elfyn Llwyd: As the Secretary of State will know, total pay in Wales has fallen by 8% since 2007, one of the biggest falls in living standards in Europe. The spending review will not help the Welsh economy very much, taking a further £1 billion out of the Welsh economy—and the Labour party has now signed up to that. It is for Ynys Môn to decide whether it wants Labour cuts or Conservative cuts. Which does the Secretary of State think would be appropriate?

David Jones: I will make no apologies for the way in which the Government have treated the interests of Wales since we came to power. We have seen more infrastructure investment in Wales under this Government than under 13 years of Labour and I am proud of the support we are giving to Welsh families and the Welsh economy.

Elfyn Llwyd: The IMF—the high priests of austerity—said that the Government should cut less and start spending more on infrastructure projects. The re-announcement of HS2 last week was sort of welcome, but the cost has gone up to £50 billion. Is the Secretary of State satisfied that Wales will not be given the £2.5 billion consequential?

David Jones: HS2 is a United Kingdom project and both north and mid-Wales will benefit from it. I know that the right hon. Gentleman uses the north Wales line regularly, so I presume that he will support our campaign for electrification of that route.

Jonathan Evans: In the spending review, the Chancellor made a significant announcement about capital expenditure. What steps is the Secretary of State taking to ensure that we in Wales get the appropriate proportion of that capital infrastructure spend?

David Jones: I believe that Wales has had more than a fair share of capital expenditure announced. Let me reiterate: the electrification of the south Wales and valley lines, the north Wales prison and the commitment to support new nuclear through guarantees.

Owen Smith: The reality is that since 2010, the Welsh budget has been cut in real terms by £1.7 billion, or 11%, yet on Welsh television last week the Secretary of State for Wales said that Wales had “got off lightly”. I know that the right hon. Gentleman is not exactly famed across the House for his humour, but was that meant to be a joke?

David Jones: Compared with the average cut across Whitehall, which was 8%, and the cut to the Wales Office budget, which was 10%, I would say that the real-terms cut of 1/9% for Wales, because of the protection of the health budget and the education budget, is a good deal.

Owen Smith: The answer is clear: Wales is meant to be grateful for this Government’s largesse, but the reality is that on the right hon. Gentleman’s watch, the budget is down £1.7 billion, real wages are down £1,700, 3,000 more people are out of work, 35,000 people are using food banks, 33% of children in Wales are in child poverty and 400,000 people have lost their tax credits. If that is “getting off lightly”, heaven help the most vulnerable in Wales if he and his Government decide to get serious.

David Jones: The hon. Gentleman is in a terrible quandary. On the one hand, he wants to support his Westminster boss and accept coalition spending cuts; on the other, he wants to obey his Cardiff boss who says, “Enough is enough,” and borrow more: one man, two guvnors.

Energy Policy

Craig Whittaker: What discussions he has had on the effect of the Government's energy policies on the Welsh economy.

Stephen Crabb: This Government’s energy reforms are designed to attract substantial investment in energy infrastructure throughout the UK, including in Wales. I believe that Wales has a key and significant role to play in meeting the challenge of creating a low-carbon energy network, fit for the 21st century.

Craig Whittaker: Does the Minister agree that last week’s announcement on contracts for difference provides future certainty for all investors?

Stephen Crabb: I certainly do agree. That announcement and other spending review announcements show that we are a serious Government—serious about attracting the investment that Wales and the UK need to keep the lights on and upgrade our energy networks.

David Hanson: How many green deal starts have there been in Wales? Will the Minister reflect on the fact that there are likely to be very few, and that businesses told him so?

Stephen Crabb: I am surprised that the right hon. Gentleman tries to criticise the green deal programme. We are in the early weeks of a 20-year programme that will lead to real improvements in energy efficiency and help to tackle fuel poverty in Wales. Perhaps he would like to come with me on a visit to the British Gas green deal academy in Tredegar, where he will see the value of the green deal for Wales.

Hywel Williams: It is intended that 10% of UK energy consumption will be carried across Ynys Môn and the Menai straits on pylons. At the same time, electricity from Scotland to England will not go through the Lake district, but be carried undersea to the Wirral and across the Wirral underground. Why the difference?

Stephen Crabb: As I understand the project across the Menai straits, four options are being looked at and subsea is one of them. I shall certainly discuss the
	matter with National Grid, as I recognise the significant concern, and I will follow up with the hon. Gentleman in due course.

Nia Griffith: The Welsh steel industry could have to wait yet another year for the Government to get state aid clearance for the energy-intensive industries package—a package that would not have been necessary had the Government not gone it alone and introduced such a high carbon floor price. What can the Minister do to secure interim support to prevent energy-intensive industries in Wales from being forced to run down production and lay off workers?

Stephen Crabb: I and the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), recently met representatives of different industries in south and north Wales for a round table to discuss precisely that question. Those present included Tata Steel and Celsa Steel, large industrialists from south Wales, and Toyota from north Wales. We are looking at specific solutions that will keep the Welsh economy powering ahead.

Legal Aid

Chris Evans: What discussions he has had with the Secretary of State for Justice on the effect of the Government's legal aid proposals in Wales.

David Jones: I recently met my right hon. Friend the Justice Secretary to discuss matters relating to Wales, including the proposed reforms to criminal legal aid in England and Wales. I have also met Welsh representatives of the legal profession to hear their views on the proposed changes.

Chris Evans: Research by the Monmouthshire Law Society found that law firms serving Gwent would have to make up to 15 members of staff redundant if they lost their criminal legal aid contract. Does the Minister share their belief that these changes are the final nail in high street law firms in Wales?

David Jones: No, I do not. It is clear that there have to be reductions in legal aid spend, and a consultation is ongoing. Recently, my right hon. Friend the Justice Secretary made it clear that, having listened to representations, he believed that choice is important both to clients and to solicitors, and choice will be incorporated in the final proposals. [Interruption.]

Mr Speaker: Order. There are some very noisy private conversations taking place in the Chamber. Let us hear Mr Chris Ruane.

Chris Ruane: The legal aid cuts in my constituency will affect many of my constituents. They will also be affected by the closure of the Rhyl family court, the closure of the Rhyl Army recruitment centre, the closure of the Rhyl tax office and, on top of all that, the closure of the Crown post office. How will that help the regeneration of Rhyl?

David Jones: With regard to legal aid, I can only reiterate the answer I gave the hon. Member for Islwyn (Chris Evans): the Government’s proposals are to ensure that choice is available to clients and solicitors’ firms.

EU Structural Funding

Andrea Leadsom: What assessment he has made of the potential effect on Wales of the proposal to limit the allocation of EU structural funds to those member states with a GDP per capita of less than 90% of the EU average.

Stephen Crabb: In February, my right hon. Friend the Prime Minister negotiated a real-terms reduction in the EU budget for the first time in its history, saving UK taxpayers an estimated £3.5 billion over the next five years. I continue to support reforms that are in the best interests of Wales and the United Kingdom as a whole.

Andrea Leadsom: Does my hon. Friend agree that imposing reforms in the structural funds would be a fantastic deal for European taxpayers and would enable Westminster to determine best the regional policy that would be in the best interests of Wales?

Stephen Crabb: I thank my hon. Friend for that question and recognise the particular expertise she has developed in this area. We are always open to listening to new ideas for reforming European funding, but I hope that she will recognise the fantastic deal that British, Welsh and European taxpayers got as a result of the historic negotiated agreement to see a real-terms reduction in the EU budget for the very first time.

National Procurement Service

Jesse Norman: What assessment he has made of the effect of the Welsh Government’s national procurement service on suppliers based in England.

David Jones: Public sector contracts are an important source of income for many businesses. Although I support efforts to make the procurement of public service contracts more streamlined in Wales, I do not think that should be at the expense of ensuring value for money regardless of where the supplier is located.

Jesse Norman: Small businesses in Herefordshire find it increasingly difficult to become accredited suppliers to the Welsh public sector. There is a growing tendency, and indeed a Welsh Government policy, to encourage public organisations to buy Welsh. Does the Secretary of State share my view that public organisations in Wales should not be discouraged from buying from English suppliers and that the Welsh Government should make it very clear that they cannot do so?

David Jones: I trust that the new public procurement process will be driven by providing value for taxpayers’ money, irrespective of where the business is located. Part of the object of the procurement service is to develop local supply chains, and in many parts of Wales the local economy will include businesses located in England.

Huw Irranca-Davies: Will the Secretary of State applaud the work of Professor Dermot Cahill of Bangor university, who is working with others and the Welsh Government to increase the number of small and medium-sized enterprises that are now making use of procurement in Wales? Would the right hon. Gentleman not say that, in that regard, Wales is leading the way?

David Jones: I hear what the hon. Gentleman says, but frankly the word from smaller businesses in Wales is that they are frequently precluded from bidding because of the Welsh procurement process. I hope that will change under the new arrangements.

Police and Crime Commissioners

Wayne David: What discussions he has had with the Secretary of State for the Home Department on the responsibilities of police and crime commissioners in Wales.

David Jones: I have discussed the responsibilities of police and crime commissioners with my right hon. Friend the Home Secretary. PCCs are democratically elected and accountable to the communities they serve.

Wayne David: Does the Secretary of State share my concern that the former chief constable of Gwent yesterday told a Select Committee of this House that she was bullied out of her job?

David Jones: I heard what the former chief constable said. I want to reiterate what I said at the last Welsh Grand Committee. I have the highest possible regard for Carmel Napier. Ultimately, however, it must be for the police and crime commissioner to make that decision, and of course he is accountable to Parliament through the Home Affairs Committee.

Kevin Brennan: Does the Secretary of State think that it is desirable that police and crime commissioners should in effect be able to sack police constables on a whim, as has happened in Gwent?

David Jones: Clearly, the power to dismiss a chief constable is one of the statutory powers given to that officer. However, when it is exercised, the police and crime commissioner must be extremely careful to ensure that the proper procedures are adopted and, furthermore, must understand that he will be accountable to Parliament.

Paul Flynn: The evidence we heard yesterday from the chief constable was that she was called in and, out of the blue, the police and crime commissioner said that he would dismiss and humiliate her. That is an extraordinary, menacing and bullying attitude. Are police and crime commissioners the Government’s stupidest policy?

David Jones: For the first time, democracy has been introduced into the policing of this country, and that must be desirable. I also heard the evidence, and no doubt the Home Affairs Committee will be reporting in due course.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Charlotte Leslie: If he will list his official engagements for Wednesday 3 July.

David Cameron: This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

Charlotte Leslie: Does the Prime Minister agree with me, and I think much of the nation, that the best way to celebrate the 65th birthday of the NHS is for the Government to strip out the culture of secrecy and cover-up that we have seen so strongly in Morecambe and Mid Staffs and put patient safety and empowered professionals back at the heart of the NHS?

David Cameron: I think my hon. Friend is absolutely right. The way to celebrate the NHS’s 65th birthday is to go on investing in it as this Government are with an extra £12 billion, but also to be on the side of patients. That is why we are introducing the chief inspector of hospitals, who will make a real difference. Yes, we do need to end the culture of secrecy and cover-up that we had under Labour.

Edward Miliband: I am sure I speak for everyone in this House when I say that there is deep concern about what we have witnessed over the past few days in Egypt, including appalling violence and deaths, just a year on from free elections. I begin by asking the Prime Minister for assurances that all the appropriate steps are being taken by the Government to guarantee the safety of UK nationals in that country.

David Cameron: I can certainly give the right hon. Gentleman that assurance—and also to safeguard our embassy in Cairo. I should add that we are advising British nationals against all but essential travel to Egypt, except for the Red sea resorts, as set out on the Foreign Office website.
	The right hon. Gentleman is right that these are deeply disturbing scenes. The level of violence is appalling. We should appeal to all sides for calm and to stop the levels of violence and particularly the sexual assaults. It is not for this country to support any single group or party; what we should support are proper democratic processes and proper government by consent.

Edward Miliband: I agree with the Prime Minister. All of us want to see a peaceful resolution to the present crisis. Therefore can the Prime Minister tell the House what work is being done, even at this late stage, by the UK and indeed the European Union to encourage the Egyptian Government to secure a negotiated political solution to this crisis in advance of today’s Egyptian army deadline?

David Cameron: What I can tell the right hon. Gentleman is that very clear messages have been sent to President Morsi—including by President Obama, who spoke with him directly; we have also been communicating through our ambassadors—that, yes, he has a democratic mandate and we respect that, but democracy also means ensuring that everyone has a voice and leaders have a responsibility to represent all Egyptians and show they are responsive to their concerns. That is what the Government need to do in order to bring about peace and stability in that country.

Edward Miliband: I am grateful for the Prime Minister’s answer and I know that he and the Foreign Secretary will keep the House updated in the coming days.
	Let me turn to another subject. The country will need 240,000 extra primary school places by 2014. Can the Prime Minister assure parents that that will not be met by increasing primary school class sizes?

David Cameron: I can assure the right hon. Gentleman that we put in place through the spending review the additional money for 500,000 extra school places, so we should be able to provide those school places without seeing an increase in classes.

Edward Miliband: But class sizes are rising. When the Labour Government came to office, the number of infants being taught in class sizes of over 30 was a quarter. When we left office, it was just 1.8%. It has doubled on the Prime Minister’s watch—that is the reality for lots of parents.
	Under the Prime Minister’s plans, one third of new schools are being built in areas where there are surplus places. Can he explain to parents in areas where they are struggling to get their children into primary school why he is spending money building schools where there are already plenty of places?

David Cameron: I have to say to the right hon. Gentleman that he left the biggest budget deficit in Britain’s peacetime history. We have had to make difficult decisions. That is why we have cut welfare, that is why we have cut areas of spending—but we have made education a priority. That is why the amount of money going into our schools is going up and not down. That is why we are funding half a million extra school places. That is why this Government have built 200 new school buildings since taking office.
	The right hon. Gentleman asks about new schools going into different areas. What that is code for is Labour’s opposition to free schools. We want more new, good schools. Their policy is still the same as John Prescott’s policy—remember that? The trouble with good schools is that everyone wants to go to them. Well we want good schools, but, as ever, his questions are written by Len McCluskey of Unite.

Edward Miliband: As always, this Prime Minister has no answers to the questions that he is asked. If he will not answer me, maybe he will answer David Simmonds, who is the Conservative spokesman for the Local Government Association. This is what Mr Simmonds says:
	“We know of schools that are literally falling down and still have to compete with brand new builds down the road”—
	in other words, in areas where there are surplus places. Is not the truth that while the Prime Minister is pouring millions of pounds into building new schools where there are already places, the only way he is going to meet the shortage in other areas is teaching kids in Portakabins and increasing class sizes?

David Cameron: The fact is that the last Labour Government cut primary school places. Let me tell the right hon. Gentleman what this Government are doing. The education capital budget is £21 billion over the next six years: that is what we are doing. What is so interesting
	is that he is taking his script from the trade unions, who do not like choice, who do not like new schools, who do not like free schools—they want to control everything. But we know one organisation they have got control of. We see it in black and white—they have taken control of the Labour party.

Edward Miliband: I am speaking for parents up and down this country—[Interruption.]

Mr Speaker: Order. There is the usual, very low-grade, very substandard, very unnecessary heckling. If the session has to run longer, it has to run longer. Let us try to observe some decorum which the public can respect.

Edward Miliband: Let us have a debate about ethics. This is a Prime Minister who had dinners for donors in Downing street. He gave a tax cut to his Christmas card list, and he brought Andy Coulson into the heart of Downing street. The idea that he is lecturing us about ethics takes double standards to a whole new level.
	In this one policy on schools we see the hallmark of this Government: they make the wrong choices on tax and spending. The millionaires’ tax cut, the top-down reorganisation of the NHS, and schools in areas where there are surplus places—and all the time they repeat the meaningless mantra, “We’re all in this together.”

David Cameron: The right hon. Gentleman goes up and down the country speaking for Len McCluskey. No wonder the former Home Secretary calls them “the party of the graveyard”. I have the press release here: “How Unite plans to change the Labour Party”. [Interruption.] I know you are paid to shout by Unite, but calm down a bit. This is what it says: “We give millions of pounds to the party—the relationship has to change” and
	“We want a firmly class-based and left-wing general election campaign”.
	That is what this week shows: too weak to sack his Health Secretary, too weak to stand up for free schools, too weak to stand up to the Unite union, too weak to run Labour, and certainly too weak to run the country.

Karen Lumley: New rules mean that my constituents in Redditch have to register individually if they want to vote to stop electoral fraud. Does my right hon. Friend think the same rules should apply to joining a political party?

David Cameron: My hon. Friend is absolutely right. Individual voter registration is a major step forward, but, frankly, we have a situation with one of this country’s political parties whereby it has become apparent that votes are being bought and people signed up without consent—all done by the man, Len McCluskey, who gave the right hon. Member for Doncaster North (Edward Miliband) his job.

Stephen Timms: There was demand for food banks from 30,000 households in the year before the general election, but the figure was 350,000 households last year. Will the Prime Minister acknowledge, unlike his noble friend Lord Freud, that rocketing demand for food banks shows we have a problem?

David Cameron: I am sure that the right hon. Gentleman, as a member of Unite, will want to look very carefully at his own constituency Labour party. Who knows how many people it has bought and put on the register?
	Food bank use went up 10 times under Labour—that is what happened—and it is this Government who are helping working people by freezing their council tax, giving 24 million people a tax cut and taking 2.4 million of the poorest people out of tax.

Philip Davies: The Prime Minister will be aware of the recent terrible stabbings in my constituency that led to the death of Louisa Denby, aged 84, and the serious injury to nine-year-old Jason D’Arcy, who was playing in the park. Will the Prime Minister join me not only in praising the police for their swift action in making arrests, but in supporting the local community and congratulating it on its steadfastness and community spirit, which has helped it get through a traumatic period?

David Cameron: I certainly join my hon. Friend. These were truly shocking events. To read this morning about the young the boy who staggered out of the park bleeding, having been stabbed, and the grandmother who was described as so much of a community member that she was seen as everybody’s grandmother was truly disturbing. I join my hon. Friend in praising the police and the local community. We must make sure that justice is done.

Clive Betts: The Government have promised that by 2016 no one will have to pay more than £72,000 towards the cost of their personal care. I do not know whether the Prime Minister had a chance to read an article in Saturday’s Financial Times, but it said that the cap will be not on actual costs, but on eligible costs, which will not include people’s costs in meeting their moderate care needs or, indeed, all the costs they incurred in going into a private residential home. Is this not another example of the Prime Minister promising to do one thing when in reality he plans to do something completely different?

David Cameron: What we are introducing is what was debated and discussed in this House in terms of those costs that will be covered and those that will not. I have to say to the hon. Gentleman that the Labour party had 13 years to cap the costs of care and do something about the rising costs of social care, but it did precisely nothing.

Anne McIntosh: May I congratulate the Government on achieving political agreement on the next round of common agricultural policy reform? May I also make a plea that proper time be taken to agree its implementation in order to ensure a level playing field and a fair deal for Britain and our farmers?

David Cameron: My hon. Friend is absolutely right: we have got a good deal on the common agricultural policy. We need to listen carefully to our farmers’ concerns so that they are not disadvantaged compared with other countries. We also need to take the time to introduce the new system, because when the single farm payments
	were introduced so quickly under the last system we suffered large fines from Europe as a result. My hon. Friend is being extremely wise on this issue.

Geoffrey Robinson: Is the Prime Minister aware of the rather disturbing commitment given yesterday by his Chancellor to continue to interfere and intervene in the affairs of the Royal Bank of Scotland on behalf of the taxpayer? Is he also aware that the Chancellor’s last intervention—the completely irresponsible ousting of Stephen Hester—has cost the British taxpayer £4.5 billion so far as a result of the loss in value of their shareholding? Will the Prime Minister, as First Lord of the Treasury, instruct his Chancellor to desist from any such interventions in the future?

David Cameron: What I would say to the hon. Gentleman, who I know has great experience of lending money, is that it is important that the Government stand up for the taxpayer and ensure that Royal Bank of Scotland has the right strategy and the right leadership so that we get back the money that was put into the banks by the last Government.

Julian Huppert: Two days ago saw the start of independent retailer month. Does the Prime Minister agree that we need to do more to support local independent shops, to keep our high streets vibrant and creative, and to avoid takeover by multiple retailers and the formation of clone towns?

David Cameron: On this issue, I very much agree with the hon. Gentleman and think that he speaks for a lot of Britain. We should be working out what we can do through the Portas review and in other ways to back our town centres. We should be looking at how the rates system works for our town centres. We should also be looking at the planning system, as we are, and how we can use change of use to back our town centres. We should work with local authorities that want to see their town centres succeed. This is a vital issue for towns up and down our country, and it has my full backing.

Ministerial Visits

Nick Brown: When he plans to visit the north-east of England.

David Cameron: I very much enjoyed my recent visit to the Nissan factory in Sunderland for the launch of the first mass-market electric vehicle to be fully produced in the UK. That will support more than 500 jobs at the plant and 2,000 jobs across Britain’s car industry. I look forward to visiting the north-east again soon.

Nick Brown: When the Prime Minister next visits, he will see again for himself that the key issue facing the region is unemployment. There are more than 20 applicants for every advertised vacancy. His policy of local enterprise partnerships and enterprise zones is not having the same effective impact on the region’s economy as the development agency had. Will he consider the appointment of a Minister to work with the local enterprise partnerships and Members of Parliament from the region to push forward the private sector employment agenda?

David Cameron: Ministers do work with the enterprise zones. Let me give the right hon. Gentleman the figures. Obviously we want to see more, but employment in the north-east is up by 9,000 and private sector jobs in the north-east by 37,000 since the election. There is not only the success at Nissan: Hitachi is committed to building a new train building plant in County Durham, which will bring 700 jobs; the new Tyne tunnel opened in 2011; and extra money is going into the Tyne and Wear metro. All those things will make a difference. In the right hon. Gentleman’s constituency, the youth claimant count has fallen by 4% over the past year.

Alan Beith: On his next visit, will the Prime Minister take the opportunity to promote apprenticeships and the support that the Government are giving to them among north-east businesses? Will he also take another look at the A1 and press the Department for Transport to get on with dualling it?

David Cameron: The last time I was in the north-east, I made a speech about apprenticeships. It is remarkable how many people have started apprenticeships under this Government. On the transport issue, we are funding feasibility studies into fixing problems on the A1 north of Newcastle to Scotland and on the Newcastle and Gateshead A1 western bypass. We are also improving the A19 between Newcastle and South Shields. That is a much better record than that of the Labour party. Even though it had a Prime Minister who came from the north-east, it never did what we are proposing to do with the A1.

Engagements

Luciana Berger: Given that the Prime Minister is so keen to talk about infrastructure investment, will he explain why his Government have cut capital investment again in 2015-16 by nearly £1 billion?

David Cameron: The hon. Lady is wrong. If she looks at the figures, she will see that we have added to the plans that Labour had for this Parliament and are increasing the amount of capital spending. The Opposition come to this House and oppose changes to welfare, oppose cuts to Government programmes and oppose the efficiency changes that we are making. They have not supported a single cut that we have made. If they did all the things they say, there would be no capital spending at all. That is the problem with the weakness of the Labour Front Benchers: because they have taken no tough decisions, they cannot support the capital spending that this country needs.

Harriett Baldwin: Can the Prime Minister confirm reports from Jordan that a new treaty has been signed and that this country could have the pleasure of seeing the back of Abu Qatada as soon as this weekend?

David Cameron: I can confirm that this treaty has been taken through both the Jordanian Parliament and our own, but I do not want to say anything that in any way could stop what we all want to happen happening.

John Cryer: When the Government tried to get workers to exchange their rights for shares, we were told that 6,000 businesses would sign up. In the event, only six have even shown an interest—not 600 or 60, only six. What went wrong?

David Cameron: The programme has not even started yet: it starts in September. It is a programme that has been praised by the Institute of Directors, the CBI and the Federation of Small Businesses, but of course it has not been praised by Len McCluskey and the Unite union. The hon. Gentleman is a member of Unite, so he has to stick to their script. What a sad day for democracy.

Ministerial Visits

David Nuttall: When he plans to visit Bury North constituency.

David Cameron: I enjoy all my visits to Bury. I look forward to visiting it again, and I always take special time to look at the statue of Sir Robert Peel.

David Nuttall: Whenever the Prime Minister does next find time to sample the delights of Bury, Ramsbottom and Tottington, will he join me in meeting some of the hundreds of local small businesses and charities that will be £2,000 a year better off from next April because of the new employment allowance, which will cut employers’ national insurance contributions, giving them a real incentive to create genuine new jobs?

David Cameron: My hon. Friend is right: you can now walk down any high street in any town in Britain and point out to shopkeepers and business owners that if they employ people, they will see a £2,000 reduction in their national insurance bill, and if they do not employ people, they can take people on and not pay national insurance. That is possible only because of the tough decisions the Government have taken on public spending and welfare, decisions that have never been backed by Labour, but which demonstrate that we are on the side of people who work hard and want to get on.

Angus Robertson: The Prime Minister’s deputy party leader in Scotland describes the UK Government’s scaremongering about independence as “silly”; one of his key donors in Scotland describes it as “puerile”; and the country’s leading Conservative commentator says that it is “tripe”. Given that the Prime Minister is in charge of Project Fear for the UK Government, will he ditch this silly, puerile tripe?

David Cameron: I have a remarkable feeling of déjà vu, because I was asked precisely this question yesterday. I will give a similar answer: the information that has been produced by the Government on what would happen under Scottish independence is impartial, extremely powerful and very sensible. The fact is that the Scottish nationalists are losing the arguments on jobs, the economy and the influence that Scotland would have in the world. I say bring on the referendum, because they are losing the battle.

Engagements

Steven Baker: Last Sunday, High Wycombe Rotarians raised more than £10,000 for local under-privileged children. I feel sure the Prime Minister will join me in encouraging membership of a full range of voluntary service clubs in the community, but does he agree that those wonderful voluntary institutions stand in stark contrast to the kind of institution that would try to block-buy political influence despite—[Interruption.]

David Cameron: My hon. Friend is right. It is a huge honour for me to be an honorary member of my local Rotary club in Witney. Such clubs are an important part of the big society, they raise a lot of money and they do an excellent job, but they certainly do not go around hoovering up members by making single payments from trade unions in order to buy influence.

Thomas Docherty: Back in March, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) said,
	“I wouldn’t be sleeping if we didn’t have 10,000 signed up to the Green Deal by the end of the year.”
	So far only four households have signed on the dotted line: is that Len McCluskey’s fault as well?

David Cameron: The hon. Gentleman is wrong about the figures. The fact is that 37,000 households have had green deal assessments and more than 5,000 have had their boilers changed. Of course, the hon. Gentleman also receives sponsorship from the Unite union—

Thomas Docherty: indicated dissent.

David Cameron: He does not? He should go through his constituency records and check all the members are still alive—that might be a good start.

Andrew Selous: The Prime Minister has rightly won praise for his work on dealing with tax avoidance, but some people have called him hypocritical. What does he say to that?

David Cameron: What is hypocritical is to take donations from a donor in the form of shares to avoid taxes. That is what the Labour party has done. It should pay back that £700,000 to the taxpayer, and that money should go to schools and hospitals. That is Labour’s shame.

Gemma Doyle: Can the Prime Minister confirm that the latest Work programme figures show that it is missing every single one of its minimum performance standards?

David Cameron: If the hon. Lady is asking about the Work programme, the fact is that it has got 312,000 people into work. Some 60% of the people going into the Work programme are coming off benefits. While the Unite union and all the Unite Members opposite might
	not want to hear it, and while it might not be part of Len McCluskey’s script, the fact is that this programme is twice as good as the flexible new deal.

Phillip Lee: As a doctor who once had to listen incredulously to a patient explain, via a translator, that she only discovered she was nine months’ pregnant on arrival at terminal 3 at Heathrow, I was pleased to hear the statement from the Secretary of State for Health today on health tourism. Does the Prime Minister agree that although the savings are modest, the principle matters? The health service should be national, not international.

David Cameron: My hon. Friend makes a very important point. This is a national health service, not an international health service. British families pay about £5,000 a year in taxes for our NHS. It is right to ensure that those people who do not have a right to use our NHS are properly charged for it. We have made this announcement, and I hoped that there would be all-party support for it, but Labour’s public health Minister has condemned it as “xenophobic”, so I assume that Labour will oppose this sensible change that working people in this country will roundly support.

Pat Glass: The bedroom tax is turning into a disaster in constituencies such as mine. Families are moving out of good-quality social housing and into the private rented sector at a greater cost to the taxpayer. Three and four-bedroom houses are now standing empty and are classed as hard to let. I even have pensioners approaching me saying that they want to downsize but cannot because small properties are prioritised for families. Is this not turning into a disaster for the taxpayer, as well as for families?

David Cameron: This is fair for the taxpayer. We do not give a spare room subsidy to people in private sector accommodation, so we should not give a spare room subsidy to people in council accommodation. The question now is for the Opposition. We have decided to remove the spare room subsidy. They now say they support our spending changes—well, they did for about five minutes last week. Is that still the case, or are they committed to repealing this? There is absolutely no answer.

Paul Burstow: The shocking abuse that was revealed in Winterbourne View and by Operation Jasmine in Wales has revealed a gap in the law, which means that while the staff are prosecuted, the organisations are never corporately accountable for what they have allowed to take place. Will the Prime Minister meet me and a small delegation to discuss how to plug the gap in the law and ensure that there is proper accountability for abuse and neglect?

David Cameron: I am very happy to meet the right hon. Gentleman, because this issue is vital. I think the Francis report had a number of recommendations on duties of care and duties of candour that we need to put in place. I am keen to ensure that we get that done.

Ben Bradshaw: Why has the royal charter, which was approved overwhelmingly by this House, still not been sent to the Privy Council when
	that should have been done in May? Will the Prime Minister assure the House and the victims that he will not do a deal with certain newspapers to further water down Lord Justice Leveson’s recommendations?

David Cameron: What I can say to the right hon. Gentleman is that we have to follow the correct legal processes. The legal advice, which we have shared with the Leader of the Opposition and his deputy, is that we have to take these things in order: we have to take the press’s royal charter proposal first, and then we have to bring forward the royal charter on which we have all agreed. I have to say that I think the press’s royal charter has some serious shortcomings, so, no, I have not changed my view.

Mr Speaker: I call Mr Drax. [Interruption.] The hon. Gentleman wanted to be called and I have called him. He should be thanking me.

Richard Drax: Thank you, Mr Speaker, very much indeed. I am most grateful to you.
	Given that the selection of parliamentary candidates is a legitimate concern of this House, does the Prime Minister agree with me that the voting irregularities in the Falkirk constituency should be looked at as a matter of urgency?

Mr Speaker: Order. The question is about a party matter. It is not a matter of Government responsibility, not a matter—[Interruption.] No, no: it is not matter for the Prime Minister—complete waste of time.

Peter Bone: The all-party group against human trafficking has raised the awareness of modern-day slavery to a great level. I am delighted to report that last night 158 hon. and right hon. Members of this House and the other House attended the annual general meeting. That is a credit to the Prime Minister’s personal commitment to this issue. Would he consider, perhaps in the next Queen’s Speech, having a modern slavery Act?

David Cameron: I pay tribute to my hon. Friend for the consistent work he has done on this vital issue. It is important that we wipe out modern-day slavery, and I very much enjoyed going to meet him and other Members to see just how bad the situation is. We are looking at legislative options, and I will be chairing a committee across Government to look at what more can be done.

Glenda Jackson: One of my constituents and her three-year-old child had become homeless fleeing the most heinous domestic violence; and now, despite legally living and working in this country for four years, an immigration technicality has made them destitute. Will the Prime Minister please examine this legislation and its possibly unintended consequences, so that in future no woman and her child may suffer double abuse?

David Cameron: I am very happy to look at the individual case the hon. Lady raises, which actually links to the last question, about modern-day slavery. Sometimes immigration rules have caused difficulty for
	those who want to flee the people who are keeping them entrapped in their homes, so I am very happy to take up the individual case.

George Freeman: Does my right hon. Friend agree that the shocking catalogue of revelations of NHS management failures highlights the importance of the Government’s quiet revolution of patient empowerment and accountability, which we need to modernise the NHS so that it becomes driven by the patients who pay for it and whom it is there to serve?

David Cameron: My hon. Friend is absolutely right. I am a huge fan of and believer in our NHS. At its best, it provides the best care in the world and incredible compassion for families who use it, but we do not serve the NHS if we hide or cover up when there are difficulties in individual hospitals. Clearly there were in Stafford, there were in Morecambe Bay and, we read today, there are in the Tameside hospital, too. That is why the reform of the Care Quality Commission and the chief inspector of hospitals post are so important, and why I think the friends and family test, which will be applied in every part of every hospital over time, will make a real difference. That is in stark contrast to what we had under the last
	Government, when inspectors were basically told not to surface problems, because it was somehow embarrassing for the Government.

Paul Flynn: Was it the Prime Minister’s conception when he set up the office of police and crime commissioner that a fine chief constable such as the one in Gwent should have a career cut short by a vindictive bully who told her to resign or he would humiliate her?

David Cameron: The point of having police and crime commissioners is to make sure there is proper accountability and that police constables have to account to a local person. That is why a number of former Labour Members of Parliament stood for the post. In some cases, such as that of John Prescott, the people of his region saw sense and rejected him.

Mr Speaker: Order. Before I call the Secretary of State for Defence to make a statement, let me say that we need an orderly House, both because that is right in itself and because it will be of interest, in the light of the coverage of this matter, to discover whether he has anything to say in the House that we have not already heard outside. We look forward to it.

Reserve Forces

Philip Hammond: With permission, Mr Speaker, I wish to make a statement on the future of our reserve forces. In November last year, I announced a formal consultation, which lasted until January this year. I am grateful for the more than 3,000 responses we received. I have placed copies of the summary of consultation findings in the Library of the House.
	More than 25,000 reservists from all three services have deployed on operations over the last 10 years. Sadly, 30 have paid the ultimate price, and I know the whole House will want to join me in saluting their sacrifice.
	In 2011, the Future Reserves 2020 Commission reported that our reserves were in serious decline. This Government responded by committing to revitalise our reserve forces as part of Future Force 2020, reversing the decline of the recent past, growing their trained strength to 35,000 by 2018 and investing an additional £1.8 billion in them over 10 years.
	We recognise the extraordinary commitment reservists make and, in return, we commit to deliver the reservist a challenging and rewarding experience, combined with an enhanced remuneration and support package and an improved deal for employers. However, to recruit the reserves we need and to train and equip them to be fit for purpose in Future Force 2020 requires substantial change. I am today publishing a White Paper setting out our vision for the reserve forces and the detail of how we will make reserve service more attractive. It also confirms our intention to change the name of the Territorial Army to Army Reserve—better to reflect the future role.
	Alongside the White Paper, I am publishing the first report of the independent external scrutiny group, which I announced last year to oversee and report on our progress in delivering Future Reserves 2020. The White Paper reiterates our commitment to improve access to modern equipment and to provide better training as part of the £1.8 billion package. About £200 million will be invested in equipment for the Army Reserve and to kick-start that programme, I can announce today that we will bring forward to this year, £40 million of investment in new dismounted close combat equipment, meaning that upgraded weapons and sights, night vision systems, and GPS capabilities will start to be delivered to reserve units before the end of the year.
	The integration of regulars and reserves is key to Future Force 2020. That integration prompts a closer alignment of the structure of remuneration across the armed forces. We have therefore decided to increase reservists’ total remuneration in two ways: through the provision for the first time of a paid annual leave entitlement in respect of training days, and through the accrual of pension entitlements under the new future armed forces pension scheme 2015 for time spent on training as well as when mobilised. These two measures represent a substantial percentage increase in total reserve remuneration.
	The White Paper sets out details of an improved package of occupational health support for reservists to underpin operational fitness. We will also ensure that
	effective welfare support is delivered to reservists and their families. Welfare officers are being recruited now for Army Reserve units. Additionally, we have already implemented measures to streamline and incentivise the process by which those leaving the regular forces can transfer to the volunteer reserve, with accelerated processing, passporting of medical and security clearances and retention of rank, as well as a “signing-on” bounty of £5,000 for ex-regulars and for direct entry officers joining the Army Reserve.
	The support of employers is crucial to delivering the future reserve forces. We seek to strengthen the Ministry of Defence’s relationships with employers so that they are open and predictable. The White Paper sets out how we will make liability for call-up more predictable; make it easier for them to claim the financial assistance that is already available; increase financial support for small and medium-sized enterprises by introducing a financial award of £500 a month per reservist when any of their reservist employees are mobilised; and improve civilian-recognised training accreditation to help employers to benefit from reserve training and skills.
	The White Paper signals a step change in Defence’s offer to employers. I urge them to take up this challenge. In turn, by building on the armed forces covenant with the introduction of the corporate covenant, we will ensure that reservist employers get the recognition they deserve. However, while Defence is fully committed to an open and collaborative relationship with employers, it is essential that the interests of reservists should be protected. Dismissal of reservists on the ground of their mobilised reserve service is already illegal. We will legislate in the forthcoming defence reform Bill to ensure access to employment tribunals in claims for unfair dismissal on the ground of reserve service, without a qualifying employment period.
	The job that we are asking our reservists to do is changing, and the way in which we organise and train them will also have to change. That will impact on force structure, and on basing laydown. The force structures and roles of the maritime and air reserves will remain broadly similar to now, although increased in size and capability. The Army, however, has had to substantially redesign its reserve component to ensure that regular and reserve capabilities seamlessly complement each other in an integrated structure designed for the future role. That redesigned structure has been driven primarily by the changed function and roles of the Army Reserve and by the need to reach critical mass for effective sub-unit training.
	The details of the future Army Reserve structure are complex, and beyond what could coherently be explained in an oral statement. I have therefore laid a written statement, supported by detailed documents which have been placed in the Library of the House, showing the complete revised order of battle of the reserve component of Army 2020.
	The restructuring will require changes to the current basing laydown of the Army Reserve. The TA currently operates from 334 individual sites around the United Kingdom, including a number of locations with small detachments of fewer than 30 personnel. Some of those sites are seriously under-recruited. To maximise the potential for future recruitment, the Army has determined that, as it translates its revised structure into a basing laydown, it should take the opportunity to rationalise
	its presence by merging small, poorly recruited sub-units into larger sites in the same conurbation or in neighbouring communities. As part of that exercise, the Army Reserve will open or reopen nine additional reserve sites.
	However, the consolidation of all poorly recruited units would have led to a significant reduction in basing footprint and a significant loss of presence in some, particularly rural, areas. I have decided that that would not be appropriate as we embark on a major recruitment campaign. We will therefore retain a significant number of small and under-recruited sites that the Army considers could become viable through effective recruiting. The units on those sites will be challenged to recruit up to strength in the years ahead. Over the next couple of years, we will work with local communities, through the Army’s regional chain of command, to target recruitment into those units. I know that right hon. and hon. Members will want to lead their local communities in rising to that challenge.
	The result of the decisions I am announcing today is that the overall number of Army Reserve bases will be reduced from the current total of 334 to 308—a net reduction of 26 sites. With your permission Mr Speaker, I will distribute a summary sheet that identifies the reserve locations being opened and those being vacated.
	The White Paper and the written ministerial statement on structure and basing set the conditions to grow and sustain our reserves as we invest an additional £1.8 billion over 10 years in our vision for the integrated reserves of Future Force 2020. That vision calls for an even bigger contribution from our reservists and from employers as we expand the reserve forces. I am confident that both will rise to the challenge.
	For the first time in 20 years, the reserves are on an upward trajectory. Those of us who are neither reservists nor employers can none the less provide vital support and encouragement to our fellow citizens who make such a valuable contribution to delivering our national security, and I know that Members on both sides of the House will want to take the lead in urging our communities to get behind the reserves and the recruiting drive that will build their strength to the target level over the next five years. I commend this statement to the House.

Jim Murphy: I thank the Secretary of State and his officials for giving me advance briefing, but I am disappointed by the fact that we have been given only half a statement. The House does not have the luxury of possessing a list of the bases that the Government intend to close, because that has not been shared with Members on either side the House. It does not appear to be in the Library either, and it is not contained in the White Paper. I will happily accept your guidance, Mr. Speaker, on whether or not I should continue.

Mr Speaker: It is certainly open to the right hon. Gentleman to continue. If it was the Government’s intention that such further details should be available in the Vote Office and they are not, that is at the very least regrettable, and arguably incompetent. If it was not the intention for the material to be available, it should have been.

Philip Hammond: rose—

Mr Speaker: Order. I do not think that the Secretary of State can respond at this stage. He will have to do his best to respond to questions later, and we shall have to cope as best we can, but the situation is deeply unsatisfactory.

Jim Murphy: Is it your advice that I should continue, Mr. Speaker, on the basis that the House has not been provided with the information relating to the statement?

Angus Robertson: On a point of order, Mr. Speaker.

Mr Speaker: Order! I cannot take points of order in the middle of a statement.
	The shadow Secretary of State is his own best adviser. He has material, he is a dextrous fellow, and I suggest that he will wish to continue.

Jim Murphy: Under your guidance, Mr. Speaker, I shall of course do so, but I am sure that Members in all parts of the House will, like me, consider it utterly unacceptable that we are being expected to comment on a statement that has not been shared with the House. We have been told that a number of bases are to be closed—26, I understand—but the House is not in a position even to scrutinise any of the measures that have been advocated by the Government. I do not think that that is malevolent; I believe it to be utterly incompetent. However, on the basis of your advice, Mr. Speaker, I shall continue.
	We support an enhanced role for the reserve forces, working alongside regulars to project force globally. Our reserves make an enormous contribution here at home in many ways, including the 2,000 who helped to protect the Olympics. Many serve overseas in faraway terrain in the name of national security. It is right that we pay tribute to each of those who have served, and above all to those who have lost their lives. It is even more important for us to reflect on their courage, professionalism and patriotism so soon after Armed Forces day.
	While we champion reserve forces, we recognise the need to modernise. However, it is worrying that rather than synchronising the reform of the Army with that of the reserves, today’s announcement appears to have been belated. There are also fears that the reserves uplift is designed not to complement our Army, but to supplement lost capacity. Many people will reasonably want the Government to explain the defence rationale. They will want to know why the cuts in the regular Army are happening regardless of the success of any uplift in the reserves. Concern about that is only added to by the fact that the TA recruitment targets were missed by more than 4,000 last year.
	Labour Members welcome much of today’s announcement—that which has been shared with the House—including the information about mental health. Increased training alongside regulars and investment in equipment will enhance reserves’ capability. Transferability of qualifications will encourage recruitment, and the change in the name is welcome. However, there will undoubtedly be concern and real hurt in the 26 as yet anonymous communities in which centres are being closed. We will examine the detail of that as soon as the
	Secretary of State and his team deign to share it with the House, as they have already shared it with the media.
	There will be concern in certain parts of the country, particularly Scotland and the south-west of England, about some of the decisions that seem to have been reached. We have said repeatedly that we want, and the country needs, a reservist plan to succeed, but much of that will depend on getting the offer right for employers and reservists. A central challenge to be overcome is ensuring that reservists’ employment patterns are compatible with longer deployment periods, and that they do not face discrimination in the workplace. Service experience is an enormous asset to business, but despite that, a recent survey by the Federation of Small Businesses found that one in three employers believed that nothing would encourage them to employ a reservist.
	Will the Secretary of State comment on the balance between transparency and security, particularly in respect of reservists in Northern Ireland? Will he also tell us what measures he will introduce to ensure that the employers who are least well equipped to absorb the impact of large-scale deployment, such as small businesses, are able to manage requests for leave?
	Engagement with public sector employers is compulsory. We should not be inviting demands on the private sector that we would not make of the public sector. Will the Secretary of State explain how the process will be managed and monitored across Departments, and will he tell us how many Departments currently bill the Ministry of Defence for the cost of members of their work force who are deployed as reservists?
	It is essential that those who volunteer to protect our country are protected in their workplace. The announcement on access to unfair dismissal tribunals is welcome, but on discrimination at the point of hiring, I fear that the Secretary of State may be missing an opportunity. We need to get this right, rather than be rushed, but many will worry that time spent on consultation on the principle could be better used by consulting business on specific proposals.
	A number of reservists who have recently lost their jobs will be on welfare. We have heard assertions from the Government on the bedroom tax and the armed forces that have turned out to be unfounded. I do not doubt Ministers’ intentions on welfare, but question the implementation, so for the purpose of clarity will the Secretary of State publish full detailed tables on how reservists in receipt of benefits or credits will be affected?
	On niche specialisms, can the Secretary of State say more about how he would seek to recruit reservists with specialisms where there are current skills shortages, particularly in languages, with targeted recruitment among diaspora communities?
	These reforms must succeed to fill the capability gaps, but, more importantly, they should mark a change in culture where we strengthen our front-line force with a greater and more integrated use of civilian expertise. Our modern forces must be as diverse as the threats we face, and that means having a new, high quality Army Reserve. In the interests of national security, we will work with the Government to make that a reality—but I wish to say again on behalf of the whole House how
	unacceptable I find it that I am expected to respond to a statement about the closures of bases, the detail of which was not shared with any Member of this House, whereas those who gather to record our proceedings have the full detail. It is a shameful way to behave, and occasionally Ministers have to have the courage to come and advocate their own policy in this Chamber.

Several hon. Members: rose—

Mr Speaker: Order. Before the Secretary of State rises to respond, he said in his statement:
	“With your permission Mr Speaker, I will distribute a summary sheet that identifies the reserve locations being opened and those being vacated.”
	It was not clear from that wording quite when the intention to distribute was, but clearly significant numbers of Members had not received a copy of the tri-service site summary by location, which is a detailed piece of information on one sheet. It was, however, apparently available to members of the media. I hope that the Secretary of State—[Interruption.] Order. I hope that the Secretary of State can clarify the situation, but on the face of it, it is a very considerable discourtesy to the House of Commons, and I hope he can either prove it is not, or if he recognises or accepts that it is, I am sure he will be gracious enough fulsomely to apologise to the House of Commons.

Philip Hammond: I was intending to open my remarks by apologising for the evident delay in distributing these summary sheets. The summary sheet I referred to relates to the basing and structure statement that has been made today as a written statement. However, I felt that Members would wish to have a summary of the most important element of that—the base closures—and it was my intention, Mr Speaker, with your permission to distribute that sheet as I sat down at the end of my statement, and I deeply regret that it was not available until just a few moments ago. I am also not aware that it has been distributed outside this House.
	I am grateful to the right hon. Member for East Renfrewshire (Mr Murphy) for his broad support for these measures. We have discussed these issues before, and I know the Opposition wish these measures to succeed. It is our intention that the reserves, and, as the right hon. Gentleman said, civilian contractors, will play a crucial role in the delivery of Future Force 2020, and the integrated regular reserve whole force will be at the centre of that construct.
	The right hon. Gentleman referred to “longer deployment periods”. It is not the intention to increase the maximum length of deployment period. That will remain as now, usually six months in an enduring operation, with a period of pre-deployment training to precede it.
	The right hon. Gentleman asked about transparency and security, and mentioned specifically the context of Northern Ireland. This is a perfectly fair point. We want to be as transparent as possible with employers, and we want to recognise employers, but we also recognise that there will be both employers and reservists who for various reasons will be reluctant to be identified, and we will, of course, respect that as we deliver this agenda.
	The right hon. Gentleman asked about small and medium-sized enterprises. We have today introduced a very significant bonus for SMEs, with a £500 per month
	per reservist cash bonus on top of the other allowances that are already available for SMEs when an employee reservist is called up for operations, but the right hon. Gentleman is absolutely right: on top of the cash inducement, flexibility is crucial to SMEs, and we will continue to exercise flexibility in dealing with requests for postponement.
	The right hon. Gentleman asked about public sector employers. I absolutely agree that the public sector must lead the way. Central Government have already set out a very generous offer to reservist employees in excess of that which is statutorily available. We are challenging the wider public sector to match that, and the NHS is already a very considerable provider of reservists, but I should just clarify that public sector employers are not eligible for the financial inducements we have announced today, and, indeed, for the ones that were already available.
	The right hon. Gentleman referred to the issue of discrimination at the point of hiring. As he knows, the consultation response identified that some 46% of reservists reported a perception of discrimination at some point either in the workplace or in applying for work. We have announced in the White Paper that we are today establishing a website at which reservists can report incidences of perceived discrimination, which we will then investigate. If we discover that there is a case for further action, we will take it, including considering the possibility of further measures in the next quinquennial armed forces Bill, which is due for introduction in 2015.
	The right hon. Gentleman asked about the specific issue of the spare room subsidy as it affects members of the reserve forces. We have been clear about that. There is a section in the White Paper on benefits and related matters. If the situation is still not clear to him after he has looked at that, I will be very happy to clarify further, although the Department for Work and Pensions is, of course, the lead Department on this matter. I can say this to the right hon. Gentleman, however: where any adult member of the reserves is deployed on operations or pre-deployment training and is called up and as a consequence vacates a room in their parents’—or another person’s—house, that room will not be treated as unoccupied for the purposes of calculation of the spare room subsidy.

James Arbuthnot: I declare an interest in that my daughter is a member of the Territorial Army.
	I know my right hon. Friend and the entire House will wish to pay tribute to my hon. Friend the Member for Canterbury (Mr Brazier) for what is by any standards an astonishing parliamentary achievement. Does my right hon. Friend agree that there is no plan B, and that it is absolutely essential that this reserves plan succeeds? Will he therefore persuade our right hon. Friend the Prime Minister to join forces with the Leader of the Opposition to make it absolutely plain to employers that the success of this strategy is vital in the national interest?

Philip Hammond: My right hon. Friend is, of course, absolutely right. The success of this strategy is vital in the national interest, and I very much welcome the fact that the Opposition have approached the matter in a bipartisan fashion, challenging and questioning us where appropriate, but supporting the basic principle of expanding
	the reserve forces. I would be very happy to suggest to my right hon. Friend the Prime Minister that he make a joint approach to employers with the Leader of the Opposition. I am sure both of them share the view that the support of the employer community is critical to the success of this project.

Madeleine Moon: As we withdraw from Afghanistan it will be increasingly important to have community buy-in and community awareness of our ongoing defence needs, so the building up of reserve forces within communities will be vital. It is disappointing that hon. Members, who will take a lead often in their communities to encourage people to focus on the reserve forces, do not have a copy of the statement and have belatedly had copies of the details of the areas that have been closed. I find that two are being closed in Wales, which is worrying for me because Wales’s defence footprint is already particularly small compared with that of the rest of the UK. Will the Secretary of State assure me that he will look at the impact on recruitment in Wales and the opportunity for reservists in Wales to continue to serve following the closure of these bases?

Philip Hammond: I can tell the hon. Lady that I have already done that. For example, the Territorial Army centre at Caernarfon is to close and I have looked at the distribution of the home addresses of TA members serving at that base. The nearest alternative base where they would be expected to go is at Colwyn Bay and, in fact, the majority of them live closer to Colwyn Bay than they do to Caernarfon. So we would expect the majority of them to continue to serve at the Colwyn Bay TA centre.
	I have to explain to the House that when I said in my statement that some of these small units are significantly under-recruited, I was not overstating my case. We have TA centres with six or seven people enlisted at them, and we have one where the average attendance on training nights has been one over the past year. This is not just a question of the careful husbandry of resources; it is also a question of delivering the kind of training that we have promised members of the Army Reserve. We cannot deliver effective training unless we have a critical mass at the sub-unit level, and that is the driver of all the changes we are announcing today.

James Gray: I warmly welcome many of the detailed announcements that the Secretary of State has made this afternoon about the way in which both regulars and civilians will be incentivised to join the TA and how employers—small and medium-sized enterprises, in particular—will be able to look after their employees. Nevertheless, is he not concerned that there will be a time gap between a large number of regular soldiers, sailors and airmen being made redundant, which is happening at the moment, and having the 30,000 fully trained TA members that he intends to have in place? What is he going to do about the time gap?

Philip Hammond: Of course, as my hon. Friend correctly presents, it will take us until 2018 to have achieved a 30,000-strong trained Army Reserve. We are seeking to capture as many ex-regulars leaving the regular service as we possibly can, and we expect that the £5,000 transfer bounty, together with the streamlining of the procedures for transfer from the regular to the reserve, will have a
	significant impact. He rightly says that there will not be a smooth trajectory between now and 2018—some of the measures we have to take will have short-term negative impacts before they deliver long-term positive gain—but we are clear that this is the right path to adopt.

Joan Walley: Given the confusion that we have just had, can the Secretary of State categorically confirm that our campaign to keep the Cobridge TA centre in Stoke-on-Trent open, not least because of its community work, has meant that it is definitely not for closure and will stay open? Can he also give me an assurance about the recent Supreme Court judgment relating to the late Corporal Stephen Allbutt, whereby the Ministry of Defence has a duty of care to properly equip all serving armed forces under the Secretary of State’s jurisdiction? Can he assure me that the change being brought forward today will make sure that all our armed forces will be properly equipped and kitted out?

Philip Hammond: I am a bit astonished that someone who was a supporter of the previous Government has the effrontery to sit there and challenge me to declare that all our armed forces will be properly equipped when they go into battle, given the shocking examples that we had during the last years of the last decade in Afghanistan.
	The hon. Lady correctly says that we have a duty of care, and we take it very seriously; we have made a very clear political and moral commitment to properly equipping our armed forces. I have to say to her that I do not believe that enshrining that as a legal duty, as the Supreme Court appears to have done, will help the operation of our armed forces. She also asked me specifically about Stoke-on-Trent and I can tell her that if it is not on the list we have supplied, it is not going to be vacated.

Several hon. Members: rose—

Mr Speaker: Order. I gather—I have just been informed and seen evidence for myself—that the oral statement, or copies thereof, is now being distributed around the Chamber, in what is an unedifying spectacle. I have, in all sincerity and candour, to say to the Secretary of State that, as he will know, the content of statements is not a matter for me and I take no view of them, but the administration of this matter has been woefully inadequate and, frankly, utterly incompetent. I have not known a worse example during my tenure as Speaker. I know that the Secretary of State has expressed himself in his usual, rather understated, terms, but I hope he genuinely does feel some sense of embarrassment and contrition at what has been a total mishandling by his Department, for which he is solely responsible—it is as simple as that.

Menzies Campbell: I hesitate to pile Pelion on Ossa, but you will recall, Mr Speaker, that earlier this year I had occasion to raise a similar issue with you about the provision of information—the MOD has form and, no doubt, the opportunity will be taken to revise procedures.
	A quick perusal of the list allows me to say that I am grateful that the bases at RAF Leuchars where an engineer regiment is based, and at Cupar, where a yeomanry squadron is based, both of which are in my constituency, are to be preserved. May I make a point to my right hon. Friend that is less about process and more about substance? Those, like me, who have been in the House for a long time have on many occasions heard statements of the kind we have just heard from him advocating a much greater use of the value of reserves—like me, the hon. Member for Canterbury (Mr Brazier) will recall many of them. The issue now is not what the statement says; it is the extent to which it will be implemented and the extent to which the MOD will be answerable if it is not.

Philip Hammond: First, I am indeed embarrassed by what appears to have just occurred. As you would expect, Mr Speaker, I will be investigating precisely what has happened and I will write to you to let you know what has gone wrong this afternoon. I understood that copies of the statement and copies of the spreadsheet would be distributed as soon as I sat down, and I apologise for the fact that that did not happen.
	My right hon. and learned Friend is, of course, right to say that a statement in itself, or a White Paper in itself, does not deliver the solution. But I am not coming to the House today presenting a set of ideas that we will now begin to implement; many of these ideas and processes are already under way and beginning to have effect. I have given commitments previously, and I will give them again, to keeping the House updated through the publication of both recruitment figures and trained strength figures as we turn the corner with the Army Reserve.

Angus Robertson: The Secretary of State will be aware that today is the first anniversary of the Moray Firth Tornado crash tragedy, in which Flight Lieutenant Adam Sanders, Squadron Leader Samuel Bailey and Flight Lieutenant Hywel Poole and a seriously injured fourth serviceman were involved. RAF Lossiemouth, friends and families are remembering them today, as I am sure everybody does in the House.
	On the statement, there has been a discourtesy to not only Members of the House, but to the parties in this House. Some hon. Members may not be aware that all political parties in this House—the Labour party and the parties of Scotland, Wales and Northern Ireland—receive an advance copy, and we were not provided with the appropriate information either. That is a huge discourtesy. It is unprecedented—I have never experienced it in my 13 years in this House—and it is unacceptable. Frankly, it is a dog’s breakfast and the MOD should be ashamed of itself.
	As we know, in recent years there have been disproportionate cuts to personnel, to basing, to spending and now even to the Territorial Army in Scotland. In the absence of providing the list in detail and on time, will the Secretary of State please confirm that six of our 38 Army and Navy reserve sites are to close? That is 16% of the total and it represents twice Scotland’s population share, so the disproportionate cuts continue.

Philip Hammond: The approach to dealing with the estate and the rationalisation of structure has not been territorial but was based on the structure of the Army.
	Some new major units are relocating to Scotland. To answer the hon. Gentleman’s specific questions, there are 52 reserve sites in Scotland. Seven will be vacated and a new site will reopen, which means a net loss of six. According to my calculation, that is a 12% reduction in site footprint. I accept that the hon. Gentleman does not have ready access to the information, so he cannot know this, but some of the sites in Scotland are so incredibly poorly recruited that I think that even he would struggle to argue for their retention. There are sites with an establishment of 30 or 40 and a recruited strength of six, seven, eight or 10. We clearly cannot deliver a proper offer to Scottish reservists unless we consolidate on to sites that will deliver a critical mass at the sub-unit level for training.

Julian Brazier: I congratulate my right hon. Friend and the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), on an immensely good package. In the last statement, we heard that the Government were going to get back to using formed sub-units, which is what reserve officers want. This time, we have heard that we have gripped the critical mass issue at sub-unit level, that we are resourcing equipment properly and that we will have opportunities for employers at all levels and money for SMEs. This is a package for the future of the reserves and the future of our armed forces, of which we should all be proud.

Philip Hammond: I am grateful to my hon. Friend and repeat the congratulations expressed by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on his work in this area as a member of the independent commission, a tireless advocate of the reserves and a giver of good advice over a long period on a complex issue. I am grateful to him for his endorsement, as he is one of the significant number of people in this place who understand the reserves and what the debate is all about.

Derek Twigg: I would be grateful to know why the Secretary of State proposes to close the Widnes site in my constituency. Halton has 125,000 people and I would love to know the logic behind that decision. However, my question is as follows. Is not the Secretary of State missing the point? He tells us that he wants massively to increase the recruitment of reservists, but at the same time he is closing down a number of centres around the country. How is that logical and how does it make any sense whatsoever? He particularly makes the point that he wants to recruit ex-members of the armed forces. Halton is one of the best recruiting areas for the armed forces in the country, so why would he want to close down the TA centre?

Philip Hammond: Even in conurbation areas where there are numbers of TA bases, in some cases it has been necessary to consolidate them to reach critical mass and to provide the training offer that we have committed to deliver to reservists. I should explain to the House that the TA, as structured by the previous Government’s review in 2007, had an established strength of 36,500. It never resourced that and never recruited up to that strength. We are doing two things today. We are setting out a structure and basing lay-down that will work for Future Force 2020 with a force of 30,000, but we are
	also dealing with the overhang of a hugely over-ambitious and underfunded proposition that the previous Government put in place in 2007.

Gerald Howarth: Although it is regrettable that the Secretary of State was not furnished with the correct information to enable the House to judge these matters, is it not the case that generally speaking with statements the devil is in the detail? The House will need to examine all the detail set out not only in the statement but in the White Paper. Although my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) is absolutely right that this is the only show in town, the Secretary of State should be under no illusions about the fact that this is a substantial challenge we face in cutting our regular Army to 82,000. Will the Secretary of State assure me that he will continue to keep the House regularly informed about the success of the recruitment so that the conditions that he has just set out, which applied after the last review conducted by the previous Government, do not apply to this one?

Philip Hammond: I am grateful to my hon. Friend and he is absolutely right. The complexity of such an issue requires a written statement, which is why I have made one today. The changes to the structure of the Army run into the hundreds—re-rollings, relocations and amalgamations—to create an effective force, and I pay tribute to the Army staff, who have done an enormous amount of work in producing this structure. I urge right hon. and hon. Members to look carefully at the detailed documents that have been provided today, because they explain the detailed position more clearly than an oral statement ever can. My hon. Friend challenges me to publish regular updates. I have already said that I have previously committed to publishing recruitment figures and trained strength figures—on a quarterly basis, I think—and I repeat that commitment.

Jeffrey M Donaldson: We welcome the broad thrust of the statement. As the Secretary of State will know, the reserve forces in Northern Ireland are among the best recruited of any region in the United Kingdom. Indeed, 2nd Battalion the Royal Irish Regiment is one of the best recruited reserve infantry units in the British Army. Although we welcome the decision to reopen Kinnegar, will the Secretary of State explain the decision to close the Territorial Army centre in Armagh?

Philip Hammond: I am afraid I shall be repeating myself. The right hon. Gentleman is absolutely right that Northern Ireland is one of the best-recruited areas—in fact, most of the units in Northern Ireland are over strength and we appreciate the commitment of the community in Northern Ireland to reserve service. The changes to Army structure and the delivery of efficient and effective training require the closure of the TAC at Armagh and the opening of an additional site. I hope that the right hon. Gentleman will accept that the transfer from Armagh to Portadown is part of the Army’s best effort to deliver the most effective way of training, recruiting and managing the reserve Army in Northern Ireland. We are not talking about something for just the next couple of years but about a structure and lay-down that we expect to endure for many decades and to form the basis of the fully integrated Army we all want to see.

John Baron: I suggest that the Government have still failed, however, to show that their plans represent value for money or are in the best interests of this country. The fact that further cash incentives have been announced today, that that ex-regular reservists will be on a better scale of pay than brigadiers and that TA numbers have been falling all point to doubt being cast on Government plans—and that is before we consider the issue of capability. Would it not be wise to halt the disbandment of the regular battalions and to stop the loss of 20,000 regular troops until we know for sure that these plans will work?

Philip Hammond: My hon. Friend returns to a familiar theme—he has suggested that course of action to me on many previous occasions. We are restructuring our armed forces to reflect the threat they will face in the future, as identified in the strategic defence and security review, and to respond to the fiscal challenges we must address if we are to have a stable platform for the proper defence of this country. I am afraid to say to my hon. Friend that although it might be tempting to wish that we had the resources to retain the regular Army at its historic strength while we recruit up to 30,000 trained reserves, we do not have that luxury. I think the Opposition would acknowledge—and have implicitly acknowledged—that reducing the size of the regular Army while increasing the size of the reserves is not without risk but is the best way to manage the resources we have to deliver the military output we require.

Tom Blenkinsop: When the Secretary of State says that there will be effective welfare support for reservists, including in the context of the bedroom tax, I welcome that, and I am sure that my hon. Friends do, too. However, under DWP measures reservists are already exempt from the bedroom tax, and that is not the issue. Regular members of the Army are the ones who are affected by the definition of the bedroom tax. The veterans Minister, the right hon. Member for Rayleigh and Wickford (Mr Francois), is already well aware of that and has promised a meeting with me that will, I am sure, occur soon. We must resolve the issue now, because armed forces families are about four months in arrears.

Philip Hammond: The position is the same for members of the regular armed forces: if they are deployed on operations, the rooms they leave behind will not be treated as vacated—

Tom Blenkinsop: They are.

Philip Hammond: I am happy to meet the hon. Gentleman and discuss the matter. I personally read the DWP regulations on this yesterday and I am clear that when a member of regular military personnel is deployed on operations, their room will continue to be treated as occupied for the purpose of the spare room subsidy.

Bob Russell: What happens if the recruitment strategy fails?

Philip Hammond: We are committed to recruiting a reserve force of 35,000. I remind my hon. Friend that as recently as 1990, we had a trained reserve force of 72,500, so it is not as if we are trying to do something
	that has not been done before. All our English-speaking allies operate with far greater reserve forces as a proportion of their regular forces than we do.
	I should tell my hon. Friend that the responsibility for delivering the strength required lies with the individual commands, and they understand and accept that they may have to flex resources if that is necessary to deliver the objective. We have no plan B: we will deliver these reserve numbers.

Keith Vaz: One of the huge threats we face at the moment is a cyber-attack. The United Kingdom is the primary target of operatives in 25 countries. What specific training will be given to reservists in this important but specialist field?

Philip Hammond: I am grateful to the right hon. Gentleman for allowing me to refer to that matter in detail. Part of the structure change relates to a new focus on reservists’ contributions to cyber-defence. Alongside the traditional image of the reservist, we are looking for people who spend their week sitting in front of a screen, perhaps working for one of the big IT companies, but who relish being able to deploy their skills in a more operational environment. We will specifically recruit cyber-reservists, who will not necessarily have to have the same levels of fitness or deployability as reservists in general if they are willing to deploy to add to our cyber-defence capabilities at UK locations on a routine basis.

Bob Stewart: I hope very much that we will get 30,000 trained and deployable reservists by 2018, but over the past year recruitment to the Territorial Army—the Army Reserve, as it will be—has not been great, so I am slightly pessimistic. In 2018, will the armed forces be blamed if 30,000 reservists are not fully trained and deployable?

Philip Hammond: It will be for individuals to point the finger, although I can guess where it is most likely to be pointed. I should say that, having previously declined sharply, numbers have stabilised. Of course that is not enough, but it is at least a start; the hole is not getting deeper. The purpose of announcing the measures in the White Paper is to provide the backdrop for what will now be an aggressive recruiting drive to bring through the recruits who in two years’ time—it will of course take two years—will have become fully trained members of the reserve forces.

Thomas Docherty: I am incredibly disappointed about the shambles today, not least because I learned only 20 minutes ago that Dunfermline was to close. I hope that the Secretary of State will explain the rationale behind that decision. However, written in hand on the summary sheet for this omnishambles of a statement is the word “Kilmarnock”. Will the right hon. Gentleman clarify whether that is a late addition or someone’s homework? What exactly is going on with Kilmarnock?

Philip Hammond: The hon. Gentleman is right that Dunfermline is closing: 154 Transport Regiment is to move to Bruce House Territorial Army centre, in one of a significant number of consolidations. In most cases, consolidations do not give rise to site closures because there is more than one unit on a site, but in some cases,
	where a consolidation removes the last unit or all the units on a site, logically the site closes. I emphasise again that the driver for these changes is not to vacate sites; it is to create a structure that will deliver the military capability we require and allow reservists to receive the training offer that we have set out to them today. I regret that, in some cases, that will mean that people have to travel to an Army Reserve centre in an adjoining community, but I should mention that reservists receive home-to-duty travel allowance and will therefore be reimbursed for the costs of making the journey.

Hon. Members: Kilmarnock?

Mr Speaker: There is a sort of sedentary chant of “Kilmarnock”, but—

Thomas Docherty: rose—

Mr Speaker: Order. The hon. Gentleman is an eager beaver. The Secretary of State has given his reply. If he decides he wants to say anything further in response to a subsequent question, he is well able to do so.

Philip Hammond: rose—

Mr Speaker: Does the Secretary of State wish to say it now?

Philip Hammond: Inspiration has just come to me. A new Army Reserve unit will move into Kilmarnock on an existing site, which will reopen to accommodate it.

Crispin Blunt: Nine days ago, I took part in a flag-raising ceremony at the beginning of armed forces week, organised by the borough of Reigate and Banstead, at which more than 20 organisations signed a community covenant to support the armed forces. I challenge my right hon. Friend to find any local authority that has been more forward in its support for the armed forces locally, and it is a pretty poor reward that 80% of the reservists in the borough are to disappear. May I gently register my concern about the fate of the cadet forces associated with the TA centre in Redhill that he is proposing to close? I very much want to come and see him or one of his colleagues to discuss whether, in terms of the establishment of the wider armed forces, including the cadets, they have got the decision right locally.

Philip Hammond: I recognise that individual Members whose constituencies are affected by site closures are disappointed. The site at Redhill is occupied by a Royal Electrical and Mechanical Engineers battalion. REME is being reinforced as a result of the structural changes, but there is a need for consolidation to make it work, and 103 Battalion REME, 150 Recovery Company, is to move to the Mitcham Road TAC in Croydon. My hon. Friend’s constituency will of course retain the TAC at Reigate.
	Cadets are co-located on many reserve sites. The fact that we are vacating a site does not mean that the building will be shut or the site disposed of. Where cadets are in occupation, they will continue to occupy and we will seek appropriate ways of reproviding for cadets in the same area; that may be on the same site or on one in the near vicinity.

Several hon. Members: rose—

Mr Speaker: Order. I am keen to accommodate the large number of right hon. and hon. Members who wish to contribute to exchanges on the statement, but doing so necessitates brevity.

Robert Flello: I too pay tribute to reservists, particularly those I had the privilege to meet in Afghanistan and Iraq on visits in recent years.
	May I bring the Secretary of State back to the impact on businesses, especially SMEs? As we know, they are at the heart of the British economy. I have heard his statement, but I want to return to the concern that many SMEs have, because quite often it is a key individual in the business who is a reservist, and I am not sure that £500 is enough to cover the loss of that individual. Will he, as part of the White Paper process, look carefully at how he engages with businesses, particularly those that are not members of a wider business organisation?

Philip Hammond: We engaged extensively with business during the consultation period. The definition of an SME, of course, is very broad: up to 250 employees and £25 million. The £500 a month is not intended to compensate for the loss of the employee; it is intended to be an additional recognition, on top of all the other allowances and compensation amounts that employers can already claim. One of the crucial statements we made in the White Paper, and in the actions we have already taken, is the need to streamline the claiming procedure. One of the things we heard loud and clear in the consultation was that many employers find the process so cumbersome that it is hardly worth claiming. We are confident that, by streamlining the process, we will make it much more accessible and user-friendly for employers.

Andrew Griffiths: Although I welcome the Secretary of State’s commitment to reservists and the extra funds available, clearly the announcement of the closure of the TA centre in Burton, Coltman House, will be greeted with disappointment and sadness by many of my constituents. Will he make available the rationale behind that decision and the recruitment figures to reassure me and my constituents that it is the right one? Following the earlier comments about cadet forces, Coltman House is also home to two fine cadet forces, the Army and Air Cadets, which have strong leadership and great young men and women involved. Will he meet me to ensure that those cadets have a future?

Philip Hammond: As I have just said, the cadets will remain in occupation. We are committed to providing them with accommodation, usually on the site but possibly close by, so that is the driver. I do not want anyone to get the impression that these changes are being made in order to vacate sites, because that is not the driver. The changes are being made because of Army structure considerations. It is not just about recruitment; it is also about the changing structure of the Army’s reserve component and the way it has to work in future. When my hon. Friend looks at the detailed information that has been laid in the Library, he will see that the change is part of a much bigger pattern of change to deliver the effective forces we need for the future.

Ian Austin: We have still not been provided with the detail in the written statement. Will the Secretary of State confirm that the effect of his statement today will be an overall reduction in the strength of reserve units in the west midlands, an area that makes a huge contribution to the armed forces generally? Will he also confirm that he has decided to abolish the Royal Mercian and Lancastrian Yeomanry in order to set up a Scottish yeomanry, a move that has failed twice before? If so, will he explain why, because absolutely no information has been provided about that so far? Although I have been told that the TA base in Dudley, which is currently part of the RMLY, will be retained, what confidence can we have that its long-term future will not be jeopardised by transferring the regional headquarters from Telford, which is 30 miles away, to Croydon, which is 190 miles away?

Mr Speaker: Order. The hon. Gentleman has availed himself of the opportunity to ask four questions, which he had no right to do, but I think that he will get one answer.

Philip Hammond: I am grateful to the hon. Gentleman for the opportunity to choose between his four questions. I will answer the RMLY question, because I know that other Members will be interested in it. The reason I did not include it in the oral statement is that it is a complex matter and one must limit the content of an oral statement, or else one would be severely admonished from the Chair. The RMLY’s regimental headquarters, the headquarters squadron, will be relocated to Edinburgh, where it will be renamed the Scottish and North Irish Yeomanry. The troop squadrons will remain where they are and will come under command of other yeomanry units. At Telford, a troop will remain and come under command of A squadron, which will remain based at Dudley. It is a complex change that the hon. Gentleman will be able to understand if he looks at the documents that have been laid in the Library. We expect the troop squadrons remaining in the west midlands to adopt the name of the Royal Mercian and Lancastrian Regiment in their squadron titles.

Jane Ellison: Although today’s confirmation of the closure of the St John’s Hill barracks is sad, it has been widely understood locally that that would be the case. It has been a great honour to represent the London Regiment, based at its headquarters there, which has given distinguished service in operations over recent years. Will the Secretary of State confirm that he is content with the arrangements being made for the London Regiment?

Philip Hammond: The London Regiment is a very important component of the Territorial Army. It is well recruited and plays an important role, having made a large contribution to the campaigns in Iraq and Afghanistan. The rationalisation of the estate across London to provide training opportunities and optimum use of the new equipment we will be delivering has come from the Army itself, from the bottom up, as the best way of delivering the capability we need. I know that my hon. Friend will regret the loss of the TA centre in her constituency, but the London Regiment will continue to be a very important part of the reserve forces construct in London.

Naomi Long: I welcome the Secretary of State’s comments about integrating welfare for reserve and regular soldiers. A constituent of mine, a former Royal Marine who is now in the Territorial Army, was injured on a training exercise and was unable to access Army rehabilitation and medical services in the same way he had been able to as a regular soldier. Will the right hon. Friend clarify whether the proposals will specifically address that point, and will he review the case to ensure that it is dealt with fully?

Philip Hammond: I take what the hon. Lady says at face value, but I am pretty surprised by the case she outlines. If she would like to write to the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), he will look into the matter.

Oliver Colvile: As my right hon. Friend knows, during a recent visit to the US Department of Veterans Affairs, the Northern Ireland Affairs Committee learned about how the US deals with its veterans, especially as far as mental health and other welfare issues are concerned. I suggest that he talks with colleagues in the Treasury and the Department for Work and Pensions to explore whether it might be possible to put an “R” after reservists’ national insurance numbers so that they are more easily identifiable in order to receive that kind of mental health support.

Philip Hammond: I am happy to explore that with DWP and the Treasury, but I recommend that my hon. Friend does not hold his breath while waiting for the answer. The way US veterans administration works is very different from the way we do things in this country, because they do not have the benefit of a national health service or a comprehensive welfare state.

Mark Lazarowicz: Number 13 on the list of sites for closure is in my constituency. Is the intention to consolidate its activities at other sites in Edinburgh, and particularly in my constituency? With regard to the new or reopened Navy Reserve facility in Edinburgh, which facility is that and what activities does the Secretary of State envisage being undertaken there?

Philip Hammond: As the hon. Gentleman knows better than I do, there are a number of sites in Edinburgh, and there will still be a very substantial Army Reserve presence there. The unit he is talking about, 5 Military Intelligence Battalion, will be going to Fenham barracks in Newcastle.

John Thurso: I commend the strategy and understand the logic of putting units together. I can save the Secretary of State the trouble of telling me that the Wick unit is down to six and that regularly only one attends, because I know that from conversations I have had with serving and former Territorials. That is a relatively recent development, because 10 years ago a substantial number of troops served on deployment in Iraq with distinction. I point out that it is 250-mile round trip to the nearest reserve base of any kind, so if Wick is closed it will effectively mean that the inhabitants of Caithness and
	Sutherland will no longer be able to give reserve service, and people who leave the Army and wish to be reservists will no longer be able to live in Caithness and Sutherland.

Philip Hammond: I realise that my hon. Friend will be disappointed by the decision in respect of Wick. However, he saved me the trouble of pointing out that seven people are registered at Wick, only a couple of whom regularly turn up on any training occasion. I have to say to him that it is just not possible to operate such a unit effectively.
	The issue is not penny pinching or closing a base for economic reasons; it is that we cannot deliver effective training or any effective military capability out of a base with that kind of level of strength. I am afraid that we just have to be realistic about that. I do recognise that, unlike many other closing bases, Wick’s nearest alternative base is so far away that it is not practical to expect those seven people to transfer. Many of the other bases—of the 26—that we have been referring to are within easy travelling distance of other reserve facilities.

Stephen Doughty: What concerns me particularly about the shambles of this statement is the lack of detail in the documents provided. I am learning now that yet another document has been made available in the past few minutes, which I do not have in front of me—my right hon. Friend the shadow Secretary of State has it.
	In the absence of that document, will the Secretary of State provide detail on the announcement about a new or reopened base in Cardiff? The list literally just says “Cardiff”; there is no other detail. What impact might there be, if any, on HMS Cambria, which is just over the border in the neighbouring constituency of the hon. Member for Vale of Glamorgan (Alun Cairns), but draws on many reservists from my constituency?

Philip Hammond: I think I am right in saying—I shall write to the hon. Gentleman if I am incorrect—that the decision has been taken to open an additional site in Cardiff, but the exact location has not yet been confirmed. The changes will happen over the next two and a half to three years. In some cases, there is an obvious site that we are going to reopen; in others, the Army is looking at different candidates. The Army is looking at structural conditions of buildings, for example. I will be happy to write to the hon. Gentleman and confirm that, if that would be helpful.

Bill Wiggin: I share with the House my sadness at the closure of the Caernarfon Territorial Army centre, where I was a platoon commander. My concern is about the loss of the term “Territorial Army”. The Secretary of State will be aware that the greatest threat to part-timers comes from regular officers within the MOD who starve the reserves of their resources. Will the Secretary of State make sure that that cannot happen under his restructuring?

Philip Hammond: I say two things to my hon. Friend. First, the overwhelming majority of respondents to the consultation supported the proposal to change the name of the Territorial Army, better to reflect the role that it will play in future. The second thing is that—he will just have to take my word for this—at senior level there has
	been a sea change in the attitude in the Army. The Army now understands that it has to grip this as its problem and deliver the solution. I accept that there is still more work to be done in the middle ranks of the Army officer corps, to persuade people to adopt the integrated model for the future. That is a work in progress.

Jim Shannon: I thank the Minister for his statement and concur with the statement made by my right hon. Friend the Member for Lagan Valley (Mr Donaldson) on the closure of the Armagh unit; I express my disappointment at that as well. However, the announcement that Kinnegar in Holywood will become a centre for reservists is good news, which I welcome. Civilian staff there have been uncertain about their position in recent months. Can the Secretary of State confirm that Kinnegar will not be subject to any run-down or loss of civilian personnel as it becomes a centre for reservists in Northern Ireland?

Philip Hammond: My understanding is that, at the moment, Kinnegar is mostly used as a storage facility and the number of civilians employed there is relatively small. However, I cannot guarantee—this is part of another statement, in a sense—that as that role decreases there will not be some changes in the civilian staffing level. However, if the hon. Gentleman would like me to write to him with further details of the overall position affecting Kinnegar, I will be happy to do so.

Tobias Ellwood: I declare an interest as a member of Her Majesty’s armed forces reserves in the Military Stabilisation Support Group. As the Army rebalances its regular-reserve ratio, I hope that emphasis is placed on not only war-fighting skills but nation-building, peacekeeping, upstream intervention and stabilisation, where reservists can bring their civilian skills to the fore. May I also ask the Secretary of State what more could be done to ensure that the Army stabilisation activities that qualify against Development Assistance Committee rules can be claimed against the official development aid target?

Philip Hammond: As my hon. Friend will see when he reads the White Paper—the document that the shadow Secretary of State was waving a few moments ago—we do indeed emphasise that the role of the reserves in future will include participation in stabilisation and conflict-prevention operations.
	On eligibility for ODA-compliant funding in these operations, recently my hon. Friend kindly sent me a paper that he has written suggesting areas that might be ODA-compliant. I have passed it to officials so that they can look further at whether there might be avenues to pursue.

Mark Garnier: I am grateful to the Secretary of State for his statement, although I regret the closure of the Shrubbery TA centre in Kidderminster. Can my right hon. Friend assure me that the neighbouring King Charles I secondary school combined cadet force unit is safe? Can he also confirm that the 30 or so reservists who are currently based at the Shrubbery TA centre will be given financial support for travelling a greater distance?

Philip Hammond: On that last point, as I have said already, a home-to-duty allowance is payable for travel between home and the place of duty. Over and above that, the Army will be looking on an individual basis to ensure that, within reason, anyone whose unit is closing, relocating or re-roling, and who wishes to transfer to a different unit, will be supported. We expect that to be done at local unit level, engaging with individuals to try to retain them in the reserve service if we possibly can.

Alan Beith: Instead of withdrawing entirely from a rural centre such as Berwick-upon-Tweed, which will lose its TA centre, Royal Logistics Corps and Fusiliers component, should not Ministers be looking at flexible ways of organising training and recruitment in rural areas, so as not to close off that source of recruitment?

Philip Hammond: I have looked at the situation in my right hon. Friend’s constituency. The driver is that the Pioneers, both regulars and reserves, are being withdrawn from the Army’s order of battle, so the Pioneer unit based at Berwick will no longer have a role to play. However, we hope that many of those serving in that unit will re-role and move to Alnwick, where the Army reserve centre will continue.

Andrew Turner: Drill Hall and Jersey Camp, the TA facilities on the Isle of Wight, are shared by our very strong cadet forces, who number more than 200. Given the unique transport challenges facing the island, the loss of those facilities would be a terrible blow to those young people. Will my right hon. Friend meet me and a group of constituents to discuss the matter?

Philip Hammond: I sense that the Minister for the Armed Forces is anxious to meet my hon. Friend. I can say this: if the facility has 200 cadets, the vacation by the reserves will not make any difference to the cadets’ continued use of it. It will remain in use by the cadets, as will be the case for a significant number of the bases being vacated.

Mr Speaker: The hon. Member for Pendle (Andrew Stephenson) has beetled forward by two Benches from his normal position; I am grateful that I am nevertheless able to see and recognise him.

Andrew Stephenson: Thank you, Mr Speaker.
	There is a lot to welcome in today’s statement, particularly the incentives for small and medium-sized enterprises. Last Friday, I organised a jobs and apprenticeship fair at Colne municipal hall. More than 1,200 people attended and I am pleased to say that there was a great deal of interest in both the regular and reserve forces. What more does the Secretary of State believe right hon. and hon. Members across the House can do to help deliver the plans and ensure that we recruit more reserve forces in our local areas?

Philip Hammond: I am grateful to my hon. Friend for the work that he is obviously already doing in supporting the reserves agenda, which is about raising awareness of reserves, particularly in communities where reserve units are significantly under-recruited—essentially getting behind a “use it or lose it” challenge to those communities. We
	have now created a space and will be putting in place a substantial recruiting drive. Those units need to show that they can make a sustained militarily significant contribution to the Army reserves.

Amber Rudd: SME support is essential for the success of the growth of our reserve forces, so I really welcome the financial and procedural package that has been put in place for them. What support or advice has the Secretary of State received from business organisations such as the Federation of Small Businesses to ensure that we get exactly the right package to encourage our employers to support this issue?

Philip Hammond: The FSB has been involved with us in the consultation process, along with many others. I am glad to be able to say that it, along with the other four major employer organisations, has signed the corporate covenant that my right hon. Friend the Minister for the Armed Forces launched last Friday, which includes a pledge to support reserve service. In this White Paper we explicitly recognise that reserve service impacts on different types of employer differently, and the offer that we make has to be tailored to recognise that. That will make a significant difference to our relationships with small and medium-sized employers.

Robin Walker: The 214 Battery Royal Artillery in Worcester has a magnificent new TA centre right at the heart of our city. Its officers and gunners have seen a great deal of service in Afghanistan. The whole city is very proud of having this military presence right at its heart. Can my right hon. Friend confirm that in making his difficult decisions on basing, he has paid attention to the quality of facilities available at TA centres and to the historic role of our county towns in supporting recruitment to the armed forces?

Philip Hammond: My hon. Friend tempts me, but I have to say in all honesty that the driver has been the structural requirements of the Army Reserve. There is no point in keeping a TA centre because it is a shiny new building if it does not fit into the structural lay-down that the Army needs to deliver military effect in the 21st century, so that has been the overriding consideration.

Alun Cairns: HMS Cambria in my constituency has a long, proud history in supporting the unit from the communities of Barry and Sully in Cardiff South and Penarth. The statement talks about a unit in Cardiff that is to be new or renewed, but it is not yet clear whether it is the same unit or another one in place of it. Will the Secretary of State clarify that?

Philip Hammond: It is an additional unit.

Philip Hollobone: Employer support will be crucial. There is a Queen’s award for business, a Queen’s award for technology and a Queen’s award for exports. Might there not be a Queen’s award for supporting the armed forces reserves?

Philip Hammond: We explored that in the consultation. We have decided to proceed via the corporate covenant, which already provides for recognition for employers who support the services broadly, including the reserve service, and provides them with a logo that they can put on their letterhead.

Julian Smith: I, too, welcome the measures that the Secretary of State has announced for business. However, for our smallest businesses across the UK—our one, two or three-man bands—losing a key worker will pose a particular challenge. May I urge him, as he develops the White Paper, to give special credence to their views and those of employers who are not represented by the business organisations we discussed earlier?

Philip Hammond: The FSB has of course been involved in this process. My hon. Friend’s point is absolutely valid. It will not be right or practical for all SMEs to employ a reservist, and we must recognise that fact. It will be easier for larger businesses. Many SMEs, perhaps including some very small ones, will be keen to employ a reservist, perhaps for a particular reason. We have to be flexible and tailor our package to respond to the needs of individual employers and employer types.

Mark Pawsey: May I express my disappointment at seeing on the list of surplus sites the Territorial Army centre at Edward street, Rugby?
	I thank the Secretary of State for listening to the representations on reservists by businesses, particularly small businesses, many of which stand to lose a key member of staff for a substantial period. I particularly thank him for his provisions regarding greater predictability of call-up.

Philip Hammond: I am grateful to my hon. Friend. I am sorry about the disappointment regarding Rugby. As he will know, the reserve unit there will be consolidated at Coventry—another example of consolidation to create critical mass.
	My hon. Friend is absolutely right that predictability of liability for call-up is one of the key issues for smaller employers. If, at the beginning of the year, we can give them proper notice of training periods, and as lengthy notice as possible of a period of high liability for call-up, they can plan accordingly.

Henry Smith: Last Saturday, Crawley borough council rightly signed its military covenant. That was, in part, a sign of the great respect in my constituency for the Royal Electrical and Mechanical Engineers Territorial Army centre. Will my right hon. Friend say a little more about how he sees the REME reserves developing?

Philip Hammond: The Royal Electrical and Mechanical Engineers are one of the resources on which we will be relying more in future for reserve capabilities than we have in the past. My hon. Friend gives me the opportunity to use this as another specific example. We will be looking to ensure a basing lay-down for REME units that reflects the nature of the work force in different areas. We clearly need to recruit to REME reserve units in areas where there are significant numbers of electrical and mechanical engineers in the work force. That is the right way to build the integrated whole force of the future.

Guto Bebb: There will be genuine disappointment in the town of Llandudno in my constituency at the news that the Territorial Army centre in Argyll road will see its services relocated to Colwyn Bay, but I think that that disappointment will be tempered by appreciation of the fact that it will remain a strong presence within the county of Conwy. However, it should be noted that the centre in Argyll road is also home to two vibrant cadet units which use the facilities on a regular basis. It would be appreciated in the town of Llandudno and in the wider constituency if we could have some certainty that those facilities will still be available for those two cadet forces.

Philip Hammond: Our commitment to the cadets is clear and enduring, and we will not throw them out on the street. We may at some point re-provision those facilities. That will depend on the individual site and whether the location is suitable to continue in the long term as a stand-alone cadet facility. We will find alternative facilities for them in the vicinity if, over the longer term, the decision is taken to close the building.

Points of Order

Thomas Docherty: On a point of order, Mr Speaker. Further to the exchange with the Secretary of State for Defence regarding the site at Kilmarnock, as I understand it, he confirmed that this is a 10th new or reopened reserves site. That is a direct contradiction of the figures given in the belated statement and in the exchanges with, for example, my right hon. Friend the Member for East Renfrewshire (Mr Murphy) and the hon. Member for Moray (Angus Robertson). Can the Secretary of State give any indication as to whether that information was accurate? When he writes to you, Mr Speaker, will he also be encouraged to explain what on earth has gone on with the sudden appearance of this 10th site?

Mr Speaker: If the Secretary of State wishes to respond, he is welcome to do so.

Philip Hammond: Thank you, Mr Speaker. I cannot answer the hon. Gentleman’s question from the Dispatch Box, but I will of course write to him as soon as I get back to the MOD. I am not sure that it does represent what he is suggesting it represents. Some of the sites in question are complex. I am happy to write to him and copy the letter to you, Mr Speaker, as soon as I get back to the MOD.

Mr Speaker: I happily accept that offer from the Secretary of State. As he will know, I am principally concerned with matters of order and good form. Although in a human sense, no doubt, particular sites are of interest, they are not within my sphere of competence, and he knows that. What I am interested to hear about is the handling of the matter. He has given me a commitment on that, and I am grateful for it.

Jim Murphy: On a point of order, Mr Speaker. My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) has just raised a point of order about Kilmarnock being on the list of reopened or opening sites. The only place in Scotland that is determined as a location appears to be in Edinburgh, which is nowhere near Kilmarnock. It seems that every Member of the House, including Ministers, was reading this list for the first time.
	I seek your guidance, Mr Speaker, because I was handed a copy of the Secretary of State’s oral statement as I arrived towards the end of Prime Minister’s questions, which is why I did not thank him for advance sight of it. The written statement was provided late. In fact, I have an e-mail from the House of Commons Library confirming that it arrived at 12.55 pm. That is well after the Secretary of State spoke and well after I spoke. When the House of Commons Library receives it only at 12.55 pm, something deeply untoward has happened. At 1 pm, a few minutes later, the supporting paperwork arrived.
	Then, in the midst of all that, at about the same time, the hon. Member for Suffolk Coastal (Dr Coffey), the Parliamentary Private Secretary to the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), took it upon herself to scurry round the Chamber with a poor photocopy of documentation that we should have been provided with earlier. It does not have Kilmarnock on the list, so it was not only a rushed photocopy circulated informally but perhaps also incomplete.
	My point of order, therefore, is to ask whether you would look kindly, Mr Speaker, on a request by the Minister for the Armed Forces to make a supplementary statement tomorrow in light of the fact that the weighty impact assessment arrived only in the past couple of minutes. No Member apart from myself and, I suspect, the Secretary of State is in possession of the impact assessment of the measures announced today. Would you look kindly, Mr Speaker, on a request by the Minister for the Armed Forces to make an additional statement tomorrow, so that this sordid mess can be clarified once and for all and so that we can have proper scrutiny?

Mr Speaker: What I would say to the right hon. Gentleman is that it is a matter for Ministers to decide whether they wish to make oral statements to the House. As he will be aware, the convention whereby a Minister delivering an oral statement begins it by saying, “With permission, Mr Speaker, I should like to make a statement”, is just a convention and, frankly, a courtesy that is, I think, on the whole appreciated by the House, but Ministers can make statements to the House when they wish. The right hon. Gentleman may wish to wait to see whether there is an offer of a statement, but there are various parliamentary devices open to Members to deliver the scrutiny that they think a particular measure warrants and everything ought to be looked at on a case-by-case basis. Perhaps I can leave it there for now.

BILL PRESENTED
	 — 
	Defence Reform Bill

Presentation and First Reading (Standing Order No. 57)
	Mr Secretary Hammond, supported by the Prime Minister, the Deputy Prime Minister, Danny Alexander, Secretary Vince Cable, Secretary Chris Grayling, Francis Maude, the Attorney-General and Mr Philip Dunne, presented a Bill to make provision in connection with any arrangements that may be made by the Secretary of State with respect to the provision to the Secretary of State of defence procurement services; to make provision relating to defence procurement contracts awarded, or amended, otherwise than as a result of a competitive process; to make provision in relation to the reserve forces of the Crown; and for connected purposes.
	Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 84) with explanatory notes (Bill 84-EN).

Drink Driving (Repeat Offenders)

Motion for leave to bring in a Bill (Standing Order No. 23)

Rehman Chishti: I beg to move,
	That leave be given to bring in a Bill to allow the Magistrates Court discretion to refer a third or subsequent offence for drink driving to the Crown Court for sentencing and to grant the Crown Court the jurisdiction to give a custodial sentence of up to two years.
	When a driver gets behind the wheel they have a responsibility for their own and other road users’ safety, but public safety is put at risk by those who choose to drink and drive. Studies have consistently shown that someone’s ability to drive is impaired by having alcohol present in their blood and that the risk increases as more alcohol is consumed. This risk to public safety has been recognised in law for almost 90 years since the first drink-driving offence was introduced in 1925.
	The current statutory provisions governing drink-driving make it an offence to drive or attempt to drive while unfit through drink or with excess levels of alcohol in the bloodstream. Currently the maximum sentence an offender can receive is six months in prison, which is the same for a first, second, third, fifth, sixth or even seventh offence. I believe that that needs to change so that those who continue to reoffend will face tougher sentences and those who persist in driving after drinking over the legal limits will be deterred from doing so.
	There has been a huge shift in the public’s attitude towards drink-driving over the years and we should not lose sight of the significant achievements of successive Governments in tackling this issue. In 1979, 28 people were killed or seriously injured every day in drink-driving accidents. Thirty years later the number has fallen to four a day, despite the volume of traffic increasing by 80% since the 1980s. By combining education and enforcement through the THINK! campaign run over Christmas and during the summer, road safety has improved. However, more still needs and has to be done.
	The figures show that in 2011, almost 10,000 casualties occurred when someone was driving while over the legal alcohol limit. Sadly, 1,570 people were killed or seriously injured in drink-driving accidents in 2011, which was up on the previous year. More people are in fact killed as a result of drink-driving than of knife crime, yet the maximum penalty for carrying a knife is four years in prison compared with the significantly lower six months for drink-driving.
	Worryingly, many drivers continue to ignore the risks and get behind the wheel after drinking, with 8% of drivers admitting that they have driven in the past 12 months believing that they were over the legal limit. According to a recent AA/Populus survey, one in five motorists has admitted to risking drink-driving at Christmas. Nearly 20,000 extra breath tests were carried out by the police last December and more than 7,000 of those breathalysed were found to be drink-drivers. In Medway, which includes my own constituency, more than 30 arrests were made during the Christmas crackdown.
	It is clear that the current law is not a powerful enough deterrent for many people, as 12% of offenders, some of whom will have been disqualified and uninsured, will go on to drink and drive again. The reoffending rate is even greater for high-risk offenders, including those who have previously been disqualified twice for drink-driving offences, with three out of 10 of them repeating the offence.
	I say to the Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond), who is in his place, that the same proposals that I am outlining today could also be applied to those who drive while disqualified, which is linked to drink-driving. In a recent case in Medway, a driver was caught an astonishing five times in 11 years but still escaped a prison sentence.
	The latest review into drink-driving laws in 2010 by Sir Peter North noted that it is a minority of drivers who persist in drink-driving. The coalition Government’s response to the North review stated that many drink-drivers are well above the limit—a staggering 40% of those caught are two and a half times over the lawful limit.
	To tackle this problem, it is the behaviour of that minority of hard-core drinkers that needs to be targeted. As the Secretary of State for Transport at the time of the North report, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), told the House in a written ministerial statement:
	“Their behaviour is entrenched and displays a flagrant disregard for the law and the safety of other road users.”—[Official Report, 21 March 2011; Vol. 525, c. 45WS.]
	The Government’s response indicated that the biggest deterrent is the perceived risk of the severe consequences of detection. Under the plans that I am outlining today, there would be a serious deterrent not to drink and drive.
	How would the proposal work in practice? On a first offence, the vast majority of drink-drivers receive a non-custodial sentence usually consisting of a fine and driving ban. On a second offence or in aggravating circumstances, we would expect the magistrates court to give a harsher sentence ranging from a community penalty to a custodial sentence. On a third offence, the magistrates court would have the discretion to refer the case to the Crown Court where the offender could receive up to two years imprisonment. This measure would provide the courts with the additional tools they need to tackle those who persist in flouting the law.
	The principle of increased sentences for repeat offenders proposed in this Bill has already been applied to other crimes. The Powers of Criminal Courts (Sentencing) Act 2000 provides a minimum sentence of three years for a third burglary offence. The system has also been adopted in other countries. In New Zealand, a motorist caught over the limit for a third or subsequent offence faces two years’ imprisonment. In the Australian state of New South Wales, people can receive a two-year sentence for subsequent offences. In America, many states have imposed more than one-year prison sanctions on those who reoffend three times or more.
	It is clear that in order to reduce further drink-driving casualties we need to take a tougher stance. This proposal will send a clear message to those who continue to drink and drive that they will face up to two years in prison if they persist in exceeding the legal limits and continue to
	put innocent lives at risk. This Bill will mean that we continue to have not only some of the toughest drink-driving laws, but some of the safest roads. I commend the Bill to the House.
	Question put and agreed to.
	Ordered,
	That Rehman Chishti, Keith Vaz, Kate Hoey, Steve Baker, Lorely Burt, Gordon Henderson, Valery Vaz, Gareth Johnson, Angie Bray, Mr David Ruffley, Henry Smith and John Stevenson present the Bill.
	Rehman Chishti accordingly presented the Bill.
	Bill read the First time; to be read a Second time on 22 November 2013, and to be printed (Bill 85).

Estimates Day
	 — 
	[1st Allotted Day]

ESTIMATES 2013-14
	 — 
	DEPARTMENT OF HEALTH
	 — 
	Health and Care Services

[Relevant Documents: Eleventh Report from the Health Committee, Session 2012-13, Public expenditure on health and care services, HC 651, and the Government response, Cm 8624, and uncorrected oral evidence taken before the Health Committee on 2 July 2013, on Implementation of the Health and Social Care Act 2012, HC 119-iii.]
	Motion made, and Question proposed,
	That, for the year ending with 31 March 2014, for expenditure by the Department of Health:
	(1) further resources, not exceeding £50,475,001,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,
	(2) further resources, not exceeding £2,414,054,000, be authorised for use for capital purposes as so set out, and
	(3) a further sum, not exceeding £50,292,107,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Anne Milton.)

Stephen Dorrell: It is one of the more endearing characteristics of the House of Commons that although the motion before us and those that follow it involve £517 billion of public expenditure, it falls to a Back Bencher to make the case on behalf of the absent Financial Secretary. It is obviously a minor detail that the House of Commons should be asked to approve £517 billion of public expenditure. Also, I suspect that all parties in the House are on a one-line Whip on this minor matter.
	Having made that observation on the slight absurdity of parliamentary process, I will begin by saying a word about the approach to public expenditure and health policy that the Health Committee, which I have the honour to chair, has adopted since the beginning of this Parliament. We have our differences within the Committee; it would be absurd to pretend otherwise. We were elected from different party platforms and have different views about how health care can best be delivered in our society. However, from the beginning of this Parliament, we have taken the view that there is not much point in using the Select Committee as the platform for elaborating those differences, because there are many other platforms where they may be amplified. We have sought consciously to explore areas of common ground in the delivery of health and social care, and to establish where there can be cross-party agreement.
	The easy way to achieve that objective would be to avoid all the difficult political questions. We have consciously not done that—we have dealt with the difficult questions. We have talked about commissioning in the context of the Health and Social Care Act 2012. We had a hearing this morning on the developments in the Care Quality Commission. We have not sought to avoid difficult territory, but when we are in it, we look for areas of
	common ground. That means that we are not grandstanding on health policy, but seeking to develop a coherent or, given what I will go on to say, integrated view of how health care ought to develop on a cross-party basis.
	Against that background, it is significant that we have had a consistent and serious view since the beginning of this Parliament on the questions that are raised for those who work in the health and care sector by the pressures on public expenditure that exist in this Parliament and, I believe, will exist for the foreseeable future. It is not a coincidence that the first substantive report that we issued in this Parliament was on public expenditure. In that report, the Committee coined the phrase “the Nicholson challenge”, which has passed into common parlance, to refer to the challenge faced by the health and care system to deliver quality care against the background of rising demand and, roughly speaking, flat real-terms budgets.
	That challenge was articulated first not by the Select Committee or the coalition Government but by Sir David Nicholson, a distinguished public servant, in his capacity as chief executive of the national health service in May 2009. It was endorsed by the previous Government. The Committee has sought to explore the success of the coalition Government in meeting that challenge and to bring to the surface some of the choices and challenges that are implicit in the phrase “the Nicholson challenge”. Incidentally, we know that the challenge lives beyond Sir David Nicholson.
	Let us be clear what we are talking about. Since May 2009, the core issue has been that resources are growing extremely slowly, if at all, while demand continues to rise. One does not need a degree in mathematics to know that if demand for health and care services rises, as it has in this and every other country for the last 50 years, by roughly 4% per annum and there is no new money coming into the system, the only way in which demand can be met is by increasing the efficiency with which the resources are used by an equivalent percentage each year. In other words, the Nicholson challenge is how to deliver health and care to the required standard—I will come back to that point—4% more efficiently year on year.
	I emphasise that it is not my view, nor the Committee’s view, that there are no political choices to be made about the level of resources that are committed to health and care. It falls to the Government of the day to make those choices every year when resources are voted on, as we are doing this afternoon on the estimate of £105 billion. That represents a political choice. However, members of the Committee read the newspapers, understand the laws of arithmetic and understand the broader political environment in which we live. We hear it when the Leader of the Opposition says that an incoming Labour Government would have to live with the spending plans of the current Government, at least for their first year in office. That is, to put it mildly, an exercise in expectation management by the Leader of the Opposition.
	It is against that background that the Committee recommends in paragraph 16 of the report on health and social care:
	“In our view it would be unwise for the NHS to rely on any significant net increase in annual funding in 2015-16 and beyond. Given trends in cost and demand pressures, the only way to sustain or improve present service levels in the NHS will be to
	continue the disciplines of the Nicholson Challenge after 2015, focusing on a transformation of care through genuine and sustained service integration.”
	That is an example of a recommendation that was reached on a cross-party basis. We are not signing up to decisions about funding, but saying that the health and care system faces a huge challenge to deliver more integrated services if it is to meet the quality and economic standards that are likely in any political scenario.

Andrew George: I thank my right hon. Friend for the way in which he is introducing this subject. He will acknowledge that the Nicholson challenge and the need for year-on-year efficiency gains of 4% were originally proposed under the last Labour Government. There is therefore continuity from the previous Government, through the coalition and on to any subsequent Government. Does he agree that the result of the efficiency gains must not be that NHS rank and file staff are subjected to lower regional pay and conditions, as was proposed in one region of the country?

Stephen Dorrell: I will come on to the impact on pay later. My hon. Friend is right that the challenge antedates the election of this Government and that it increasingly looks beyond this Parliament, as did last week’s public expenditure announcements. There are specific challenges implicit in the Nicholson challenge for the coalition and for the Opposition. To my colleagues in the Conservative party, who sometimes ask why we have a ring fence around the national health service, I simply say, “Understand what you are asking.” We are already strapping ourselves to the mast indefinitely into the future of meeting a rise in demand of 4% per annum without substantial growth in real resources. Looking back, we see that the national health service has delivered a 1% efficiency gain trend rate over its first 60 years, and the national average for the rest of the economy is 2%. We are expecting the health and care system to deliver a 4% efficiency gain. To anyone believing that we are likely to be able to meet demand for health and care to acceptable standards against a background of reduced resources—in other words, more than a 4% efficiency gain year on year—I say, “Do the maths.” That is the challenge to the Conservative party.

Richard Fuller: Will my right hon. Friend give way?

Stephen Dorrell: Will my hon. Friend forgive me if I complete the challenge so as to be even-handed, as the Chair of a cross-party Committee should be?
	Some Labour Members may wish to look for ways to avoid the difficult questions posed by the Nicholson challenge, but we need to remember that if we were to try to meet demand without addressing any of the efficiency questions—to take it to the other extreme—we would need £5 billion a year of new money over and above keeping up with inflation. That is more than 1p on income tax year on year, or 6p on income tax in the lifetime of a Parliament, to meet demand in the health service, unless we address the Nicholson challenge.
	The conclusion that the Committee puts to the House is that the Nicholson challenge is unavoidable. Anybody who takes any serious interest in health and care has to address it. Nobody seriously believes that any Government
	will put up income tax by 6p in the pound in the life of one Parliament simply to fund health and care, and nobody in my party seriously thinks that we can avoid meeting demand for health and care. If we cannot avoid meeting that demand, we have to deliver a 4% efficiency gain out of the service merely to allow it to live within the current real resource available to it. That is the Nicholson challenge, and it is why the Committee—from a cross-party standpoint—has said, from the beginning of this Parliament, that it is the most important challenge facing the health and care system.

Richard Fuller: I wish to challenge my right hon. Friend on the 4% efficiency requirement that is, essentially, the 4% increase in demand that we expect. I am a big believer that history is a good guide to the future, and I understand the changes in demography that will push that challenge. How much of the demand comes from a quantum increase in demand and how much from a price increase for the inputs into the health budget?

Stephen Dorrell: I do not wish to detain the House for the whole of the time available for this debate, but my hon. Friend raises an important question about how that demand is made up. The interesting thing about the drivers of demand—rising expectations, the cost and availability of modern medicine and the implications of an increasingly elderly population—which each new Front-Bench spokesman reveals as a newly discovered truth, is that they were first discovered by Rab Butler when he became Chancellor of the Exchequer in 1951. He set up a commission to ask whether the health service was an insupportable burden. The conclusion reached then, and by every successive Government since, in this and in similar processes in other countries, is that demand can be met, but it requires a serious analysis of the nature of the demand and how resources are used effectively to deliver it.
	There is a danger in discussing health and care as if they were purely an economic question, especially for those of us who have been employed in the Treasury—like you, Madam Deputy Speaker, and me. There is a danger of sounding like a Treasury Minister and implying that the economic questions are the only issues in this regard. I need only offer names to the House to demonstrate that economics is not the only issue here—Winterbourne View, Mid Staffordshire and Morecambe Bay. Our system faces huge challenges, not just to do with economics but in respect of the quality of service that is delivered on a daily basis. Put simply, it is not enough just to go on delivering the service as it is now because, too often, it fails. Implicit in the Nicholson challenge is the requirement to face profound quality challenges, as they exist in the system, at the same time as squaring the financial circle I have been describing. In some quarters, it is suggested that that is a counsel of despair—that the circle is unsquareable.
	The Committee disagrees, which is why the report states, at paragraph 30:
	“At a time when steadily rising demand for health and care services needs to be met within very modest real terms funding increases for the NHS and even tighter resource constraints on social care, the Committee remains convinced that the breadth and quality of services will only be maintained and improved through the full integration of commissioning activity across health and social care.”
	In other words, it is the Committee’s cross-party view that it is the integration—the reimagining of what health and care need to look like—that is the answer to the questions posed both by the Nicholson challenge and the quality challenges implicit in the names that I mentioned. It is important to be clear why that is the Committee’s view.
	Efficiency, as implicit in the context of the Nicholson challenge, is not just about buying a bit more cleverly or holding down costs. It is about understanding what the demand is that we are trying to meet and putting in place the structures—incidentally, I do not mean the management structures—for the delivery of care that are likely to be able to meet the demands placed on them, not over the last 50 years but over the next 20. It is reimagining and driving a process of change through the health and care system that is the only realistic challenge to the financial and quality challenges that I have articulated.

Phillip Lee: Talking of efficiency, is my right hon. Friend as shocked as I am to hear that the Department of Health spent almost £74,000 on outside consultancy to prepare for just one Public Accounts Committee hearing? If that is the case, the Department might want to lead from the front on efficiency.

Stephen Dorrell: I am sure that my hon. Friend will forgive me if, faced with an estimate of £103 billion, I do not go through every £70,000 of expenditure. However, he has made his point.
	This is where I believe the Committee has held the Government to account, although not always comfortably for the Government of the day. There is no solution to the Nicholson challenge purely through adjusting the numbers—to use a non-emotive phrase. It has been reported to the Committee that in the first two years of the Nicholson challenge, 73% of the efficiencies that have so far been delivered are attributable as follows: 16% to pay freezes, which is the point made by my hon. Friend the Member for St Ives (Andrew George)—yes, holding down wages does reduce the cost of delivery and is, in the short term, a form of economic efficiency, but it is not a long-term solution to the Nicholson challenge—and, most implausibly, 45% to just changing the tariff between the commissioner and the provider. That is not an efficiency; that is an internal transfer, that is a bookkeeping entry, accounting, make believe. Another 12% over the two years is put down as “other”, which is an old accounting technique for concealing not very much, usually.

John Pugh: Was the right hon. Gentleman able to establish exactly how much was saved through smarter and better procurement?

Stephen Dorrell: That is not listed, and so is probably among “other” and is not very much towards £5 billion. The 4% efficiency gain translates to £5 billion of recorded savings. The two biggest items are £2.5 billion through tariff efficiency and £850 million through pay freezes. We have not yet made much progress towards the process of reimagining care which, from a Committee standpoint, we regard as so important.
	I do not propose to detain the House by going through the detail of what reimagined care needs to look like, but the headlines are clear and becoming
	increasingly familiar. It is complete nonsense for us to imagine that community health and care can be provided efficiently to a high quality if we retain the distinction between primary health care, community health care and social care. Primary care is divorced from community health care purely as a result of a political fix by Nye Bevan and the British Medical Association in 1947. I was not born in 1947—indeed, not many Members were born in 1947. How much longer do we have to live with the structural absurdity that was not even a plan in 1947? It does not look like much of a plan now. Reimagining high-quality efficient care to enable people to live longer, healthier and fuller lives and avoid going to hospital unnecessarily is the core challenge that the Committee believes needs to be put at the door of policy makers in the Department of Health and in NHS England.
	I will conclude by picking out two key recommendations from the Committee’s report, and I am pleased to be able to say that one has been picked up by the Opposition. I am pleased to endorse their policy of developing the role of the health and wellbeing boards—created by my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), the former Secretary of State for Health—as the agencies best placed to develop genuine reimagination at local level of what fully integrated, joined-up health and social care should look like. It is often described as the Burnham plan. I am happy to endorse it, because the Select Committee wrote it first and we did it building on the institution created by the coalition through the Health and Social Care Act 2012. I strongly endorse the development of the health and wellbeing boards, and so, I believe, do my colleagues on the Committee.
	Joining up budgets and creating single commissioning budgets through the health and wellbeing boards is only part of the answer if that single budget then allows resources to leech away through the local authority system without checks on the limits of the definition of the services that are being secured. That is why our report recommends not just joined-up budgets and the development of the health and wellbeing boards, but an extension of the ring fence, which so many of my colleagues on the Conservative Benches do not like, so that it covers not just NHS spend but social care spend too. We did that because it makes no sense to make the case for a single health and care system, and then imagine that transfer of resource out of the NHS budget into the social care budget as free to be spent anywhere else in the local authority world.
	The commitment to a ring fence makes sense only in the context of a single integrated service if it covers the whole of the integrated service. That is why I strongly welcome the announcement made by my right hon. Friend the Secretary of State for Health that increased resources from the NHS budget would be made available to social care, but only—as he made clear to the Committee yesterday—subject to that resource transfer first satisfying NHS England and Ministers, who are ultimately accountable to this House, that it will be used for social care and not for other local authority services.
	I have sought to identify what I regard as the key issue facing the health and care system—the Nicholson challenge—and to recognise that it is not just about economics, but about quality. The only way we can respond to those two challenges is by rethinking a set of institutions that grew up for a different world and a different time. I welcome the fact that the Committee’s
	recommendations and analysis, which have been developed over three years, have been endorsed both by Labour Front Benchers, who have picked up our proposal on health and wellbeing boards, and by the coalition in the announcement my right hon. Friend the Secretary of State made last week about resource transfer, subject to an effective ministerial guarantee of a ring fence. If the Select Committee has done nothing else, it has identified common ground on which those on the Front Benches seem to be gathering.

Barbara Keeley: I thank the Chair of the Select Committee, the right hon. Member for Charnwood (Mr Dorrell), for the way he opened the debate.
	The context of our debate on public expenditure for health and care is, as we have heard, not just the substantial upward cost pressure on the NHS, but substantial cuts to the budgets of local councils, which are affecting their social care budgets. Adult social care directors tell us that £2.7 billion has been cut from care budgets since 2011, representing a significant 20% of those budgets. That level of cuts now means actual service reductions, as well as increased charges for service users—a fact brought home to me week in, week out by the cases I am now seeing in my constituency. My local authority of Salford had maintained eligibility criteria of “moderate” until this year and has been pushed by cuts into changing it to “substantial”. That is very sad.
	Often what are described as efficiency savings in social care budget cuts are actually cuts to the fees paid to care providers. Some 45% of the adult social care directors polled by the Association of Directors of Adult Social Services said that they did not increase fees to care homes to cover inflation this year, while nearly half said that providers in their areas were now facing financial difficulties as a result of savings made in fees paid to councils. In many cases, this has led to the poor care that we have had described in so many reports, and to which the right hon. Member for Charnwood has just referred. We hear of care tasks timed down to the minute, and paid care workers earning less than the minimum wage because they are not paid for travel time or costs.
	The social care directors also warned that worse cuts are still to come, given that further cuts to local council budgets are still planned. Sandie Keene, the president of ADASS, warned Ministers that further cuts could have seriously adverse consequences for families. She said:
	“it is absolutely clear that all the ingenuity and skill that we have brought to cushioning vulnerable people as far as possible from the effects of the economic circumstances cannot be stretched any further, and that some of the people we have responsibilities for may be affected by serious reductions in service—with more in the pipeline over the next two years.”
	Not surprisingly, the Local Government Association has warned the Government that they need to ensure protection for adult social care in future. Zoe Patrick, chair of the LGA’s community wellbeing board—so perhaps the most senior wellbeing board in the country—has said:
	“We need an urgent injection of money to meet rising demand in the short term and radical reform of the way adult social care is paid for and delivered in future, or things will get much worse.”
	Both the LGA and the Society of Local Authority Chief Executives have warned that the planned cuts will get in the way of implementing the Dilnot proposals and the measures in the Care Bill. They also say that the Government’s impact assessment for the Bill significantly underestimated the likely cost to councils of the new duties under the Bill—an issue that came up repeatedly on the Joint Committee considering the draft Bill. I hope that as the Care Bill makes it way through Parliament—and certainly by the time it reaches the Commons—issues to do with the cost on local authorities will be dealt with.
	Some £1 billion of funds from NHS budgets was earmarked for transfer to councils responsible for adult social services in the 2010 comprehensive spending review. However, three years into a four-year process, much of the funding continues to be spent in a short-term way—there was much focus in our report on that fact—and not on the systemic transformation that social care needs if it is to ensure sustainable services in future. Let me give an example. Of the £648 million transferred in 2011-12, 18% was used just to maintain eligibility criteria, with £284 million spent on offsetting pressures and cuts to services and another £149 million allocated to working budgets. As we have heard, that is not the sort of systemic transformation that the Health Committee would like to start seeing.
	Of course, this firefighting is not surprising given the cuts to local council budgets, which I have touched on, but it is not sustainable if our aim overall is the transformation necessary to achieve the integration of health and care services. We have seen a downward spiral in social care funding. It is clear that more must be done to move from using scarce resources when they are allocated as a sticking plaster to cover the costs. They should instead be used to build more joined-up services. With another £2 billion a year moving from the health budget to social care from 2015, it is extremely important that we start to get this right. I fully support the call made in the Committee’s report for a ring fence to protect social care funding. That is important.
	As for health spending, the Department of Health says that it managed to save £5.8 billion in 2011-12, but evidence provided to our Committee by the National Audit Office shows that much of that was made through one-off savings, such as pay restraint and other staff cost savings, reducing payments to NHS providers and some savings that were truly one-off, such as land sales, which cannot be repeated. Those savings are not sustainable and cannot continue in the long term. There is an argument, which we keep coming back to, that a lead needs to be taken as soon as possible to transform how services are delivered.
	I welcome the suggestion of a pooled budget for health and social care services to help older and disabled people. I see that as a move in the right direction. Indeed, the shadow Health Secretary, my right hon. Friend the Member for Leigh (Andy Burnham), has repeatedly made the point that integration is the future direction of health and social care. Mike Farrar, the chief executive of the NHS Confederation—I guess this was the expression of an NHS view—said of pooled budgets:
	“This allocation should help address the need to join up services and provide the right care for people, allowing them stay
	in their own homes. But NHS organisations will want to have strong assurances that the money going to social care does the job it is meant to do.
	Rather than see local health and social care budgets as separate, we need to support integrated care by bringing together providers and commissioners to look at how we can spend our money to the best effect.”
	That must be what we start to see.
	Creating joint budgets has the potential to facilitate a move towards more joined-up working, but as the right hon. Member for Charnwood outlined, there need to be safeguards. In fact, we need to be clear that the money intended for social care should definitely be spent on it. Labour’s whole-person care approach is a vision for a truly integrated service—not just battling disease and infirmity, but aspiring to give people a complete state of well-being across all the services, physical, mental and social. Shared budgets are one small step towards that, but we want to see a people-centred service, strengthening and extending the NHS in this century, not whittling it away.
	Let me turn to the long-term funding of social care to avoid catastrophic costs falling on certain groups of people, particularly those with long-term conditions or dementia. Support will be given in such a way that people must meet thresholds and a spending cap. First, people must meet eligibility criteria, which, we know now, the Government plan to set at the “substantial” level. Secondly, they must fall below a means-tested threshold. I understand that the upper level is to be set at £100,000, but the lower level is still set at £14,250, with an assumption that assets between those thresholds attract interest, which affects the calculation of social care funding.
	After all that there is the cap, set at the—in my view—high level of £72,000, plus accommodation costs of £12,000 a year. I feel that the £72,000 that individuals must contribute to their care before they exceed the cap is not as it seems. That is how the figure is expressed, but the metering will take account only of the costs that the council would pay for care. Many thousands of families are already paying a top-up for care. Cuts to council budgets, which I touched on earlier, will continue to depress the rate at which they pay towards providers, yet that is the rate that would be taken into account in the calculation of the metering.
	My hon. Friend the Member for Leicester West (Liz Kendall) has analysed the plans and said that
	“families will face losing even more of their homes than they do now”.
	Since she pointed that out, we learn that in 2016, with accommodation costs of £12,000 a year and councils at that point paying about £500 a week, it would take about five years to reach the care cap. Even at that point, we now know that care needs would have to be at the “substantial” level. Families using nursing homes charging more than the local authority rate will therefore have to pay the extra cost, as they do now.
	I have had constituents paying £40,000, plus interest, for care costs, which were taken out of the value of their home, which was eventually sold for only £60,000. There are people in my local authority area who have homes valued at only the £50,000, £60,000 or £70,000 mark who surely will look at the cap set by the Government and think that it would help them. It is unfair not to tell people that what they think is a cap set at £72,000 will, for many of them, turn out to be much higher.
	The Health Committee has committed to look at the implications of the Government setting the cap at a level higher than that recommended by the Dilnot commission. I hope that the review shows that this is not a policy to brag about straightforwardly, as the Prime Minister did today. I understand that the number of people likely to be helped by a cap set at that level is around 110,000. I am sure that many people would be surprised by that low figure. However, I am pleased that the direction of travel for Government policy is towards what the Health Committee has repeatedly set out in its reports on social care and the whole-person approach set out by my right hon. Friend the Member for Leigh. Pooled or joint budgets are a small step on the way. I hope that Government policy will start to move further towards addressing some of the other vital issues in social care that I have outlined. Unless we solve those issues in social care, we cannot move forward on the whole picture.

David Tredinnick: I wish to run through some of the points in our report for the benefit of the House and to suggest that there is one area of supply to the health service that is not being considered enough. At the moment we have two legs on the stool, rather than three.
	Before I do that, I would like to congratulate my right hon. Friend the Member for Charnwood (Mr Dorrell)—I used to know him as the Member for Loughborough, which might cause some confusion—on his speech. He is ever modest to say that the Committee came up with the term “Nicholson challenge”. I firmly remember that it was he who came up with it. It is absolutely to his credit that, as a former Treasury Minister, he has focused absolutely on the costs; and here we are today, addressing estimates and how we deal with the ever-increasing demand for health services.
	Although they have come up already, there are a couple of points that we must bear in mind. They include the devastating impact of the potential 6p on income tax if we do not get this right and the difficulties—although some of my hon. Friends might dispute this—of achieving a 4% efficiency gain.
	We have seen the impossibility of solving the problem through public sector pay restraint alone, and tinkering with therapies is another issue. How do we cope with that? Tinkering with the tariffs will not solve the problem; we have to go for a full integration of services. That issue was well illustrated by the ghastliness of the Mid Staffs experience, the Winterbourne experience and the Morecambe Bay experience—those unbelievable failures in the health service. Apart from the financial requirements, that points us in the direction of the importance of delivering improved services through integration.
	We really must focus on structures and the delivery of care. The primary response of the NHS to the Nicholson challenge should be, as the Committee said, to prioritise fundamental service redesign. That will lead to better quality care for more NHS patients. Paragraph 82 of the Committee’s report states that it is
	“inconceivable that this performance can be delivered—together with quality improvement that is…required—if planning proceeds within traditional silos.”
	We have to break down the old system and start afresh.
	Of course, the Health and Social Care Act 2012 is the foundation of this new approach. It is a Bill that had a somewhat tortuous passage through the House, with some reconfiguration, but it has delivered enormous opportunities. Yesterday, when the Health Secretary came to the Health Select Committee, I was struck when he explained to us the savings that the 2012 Act has already achieved. Although the reconfiguration is hugely costly in itself, running to over £1 billion, the fact is that the savings are already in place. My right hon. Friend the Member for Charnwood highlighted the importance of bearing down on costs, and this is already being realised through the reconstruction that the Health and Social Care Act 2012 has provided.
	The Conservative party is ever the party of choice, and we made it quite clear—in deference to my Liberal colleagues I should say that the coalition made it clear—that we want patient choice. That is essential. Through the Health and Social Care Act 2012, the health and wellbeing boards and personal budgets—they are somewhat overlooked but have proved to be incredibly successful—we have the structure to provide for patient choice.
	What we have not really addressed or seen yet is what the patients will choose to ask for. There is a supply-side issue here in the range of services, treatments and therapies that are—or are not—currently available through the service. If we are further to reduce costs, and broaden choice, we are going to have to put what I would describe as the third leg on the stool. We have the integration of health and social care, but what is also important is the integration of the range of therapies available in this country that are not necessarily statutorily regulated and available within the health service as we speak.
	You may recall, Madam Deputy Speaker, that many years ago I had the honour of serving on the Committees considering the osteopathy and chiropractic Bills, which subsequently became Acts. That legislation brought statutory regulation to osteopathy and chiropractic, which brought them more fully into the mainstream health service. The Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter)is, I am reliably informed, tasked with dealing with the next great challenge, which is herbal medicine. He may not be overwhelmingly delighted to know that there is a one and a half hour Adjournment debate next Tuesday in Westminster Hall, where we will discuss this issue in some detail.
	When we talk about 13-year spans in this place, it usually refers to 13 years of Conservative government. It has also been 13 years, however, since the House of Lords Science and Technology Committee report on complementary medicine, which recommended the statutory regulation of herbal practitioners. We must address this issue, as we will next Tuesday in some detail, but let me set out the stall by pointing out that three quarters of the population are using herbal medicine, homeopathy or other types of alternative medicine.

Stephen McCabe: The hon. Gentleman mentions 13 years, but it is only three years since the House of Commons Science and Technology Committee delivered a damning report, saying that there was no evidence base for homeopathy at all. Does the hon. Gentleman think that we should address that before we try to use precious NHS resources in this way?

David Tredinnick: There are two separate issues here: herbal medicine and homeopathic medicine. The Science and Technology report was very controversial. I now have the honour to serve on the Science and Technology Committee, and we have been looking at these issues. Let me tell the hon. Gentleman that in France, 70% of the population and all pregnant women use homeopathy. Some doctors are trained in both types of medicine, and they tend to prescribe fewer allopathic drugs for their patients, which works out much cheaper. There is a lot of research to be done on that. Homeopathy is, of course, widely used across the world, including in the United States and in India. I think this country has a lot of catching up to do. That is why, as I said to the Secretary of State yesterday, I have stuck with this issue over the years.
	I would also say to the hon. Member for Birmingham, Selly Oak (Steve McCabe) that there is a huge injustice here. Just as we had racial prejudice in the past, we seem to have a similar kind of prejudice here based on the worst possible “turf war” considerations. I think I had better leave it there, Madam Deputy Speaker, as I might be indulging your patience.
	The former Secretary of State for Health said in 2011 that he thought statutory regulation was the way forward. I have to say to my hon. Friend the Under-Secretary that he should consider going down the route of having a healthcare professionals council; I think there is some talk about having a professional standards authority. As the Minister reflects on the challenge he faces, he should remember that many people in this country are affected by this, and that we are looking to him to come up with a workable solution.
	I leave him with one thought on this subject. By chance, I spoke in a recent meeting to Lord Wilson of Tillyorn, the last but one Governor of Hong Kong. He brought statutory regulation of herbal medicines into Hong Kong. He said that he did so not just because it was better to have a properly regulated discipline that would help to avoid the misuse of prescribing, but also because of the turf war between the establishment and the herbal community. I think that there is a real danger—I shall expand on it next week—of the Minister being pressurised by people who are doing so only because of vested interests, which I think is very sad.
	I applaud the direction in which my right hon. Friend the Member for Charnwood has taken our Select Committee in focusing on the need to bear down on costs in the health service and to shine a bright light on this phenomenally difficult challenge of increasing demand and how we pay for it. I have suggested that while it is brilliant to have the integration of health and social care, if we are to satisfy the demands of people—through the different boards under the Health and Social Care Act 2012 and through personal budgets—we are going to have to look more seriously at the other therapies that are available but are not regulated or brought into the health service. The Minister really must try to grasp the importance of herbal medicine because practitioners cannot get the supplies they need to be able to practise as they should. I wish him well in his endeavours.

Grahame Morris: It is always a pleasure to follow the right hon. Member for Charnwood (Mr Dorrell) who chairs the Health Committee with
	such authority and distinction. He gave a thoughtful and helpful explanation of the Committee’s report, and made some suggestions about integrating commissioning and budgets. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) and the hon. Member for Bosworth (David Tredinnick) also highlighted several issues, and I am proud to serve with them on the Health Committee.
	We need to look at the background of what is happening because in many respects, the Government have created a situation in which the NHS is in crisis. I often refer to how we measure satisfaction with the national health service, and one established measure was the public satisfaction survey. We have seen a record fall in public satisfaction with the NHS under this Government.
	The hon. Member for Bosworth referred to evidence that the Secretary of State gave yesterday to the Health Committee, in which he cited the cost savings that reorganisation had brought about. However, we must also think about some of the hidden costs of that reorganisation such as clinicians’ time. How many clinicians carrying out a management function in clinical commissioning groups in other providers find that their time is not accounted for properly? What about the opportunity cost in skills and training applied for the benefit of patients if those clinicians are engaged in a management capacity? What about the loss of experience for managers at every level? Some people may have spent a number of years working in the health service and taken an interest in structures, but we seem to be going round in circles. We broke up what we described as large monolithic structures, formed separate mental health trusts and separated community services. It seems that the wheel has now turned full circle and we are realising the benefits of efficiencies of scale and integration.
	With the new structure, however, we have lost some management expertise in commissioning, organising and troubleshooting—again, that point was highlighted effectively by the Health Committee. The Secretary of State and his team respond that there has been a cost saving, but in fact the vacuum had to be filled by new structures. Strategic health authorities—an unloved institution—were swept away, but local area teams were created. It is necessary to have a strategic dimension to plan health care, particularly restructurings and reorganisations.
	In my view and, I suspect, for many Members across the House, this top-down reorganisation—it was not initiated by people on the ground—has impacted on front-line services and resulted in considerable expense and disruption at a time when the NHS is facing unprecedented pressures due to budgetary constraints and growing demands on the service. We have seen that manifested at the coal face, the fulcrum, in the crisis in accident and emergency departments. Unless we seriously address those issues, there is a risk to the long-term financial stability of the NHS.
	Yesterday in Committee I put on the record a rather controversial point about the Government’s claim to be maintaining funding in real terms, despite NHS inflation, which is higher than inflation in the normal economy. As right hon. and hon. Members have said, there are also a number of financial manoeuvrings—I do not know whether that is an accounting term. One concern relates to how the underspend is reallocated or returned
	to the Treasury, and I suspect that despite assurances from Ministers, we have seen an actual reduction in funding.
	Let me draw the House’s attention once more to the letter sent to the Secretary of State by Andrew Dilnot CBE, chair of the UK Statistics Authority, following representations by my right hon. Friend the Member for Leigh (Andy Burnham). Mr Dilnot wrote that
	“we would conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10.”

Stephen Dorrell: rose—

Grahame Morris: The right hon. Gentleman has risen to the bait and I will happily give way.

Stephen Dorrell: The hon. Gentleman might like to read the next sentence from the same letter.

Grahame Morris: I am grateful for that. We have argued for a number of months about the real position, and we have had a number of debates in the House about whether there has been a real-terms increase or a small decrease. I heard the arguments about NHS inflation and so on as recently as yesterday.

Stephen Dorrell: The next sentence.

Grahame Morris: I will not read that out because I will come on to the issue in a moment. First I want to talk about integration, so I will press on. Statistics published in Public Spending Statistics in July 2012 show that real expenditure on the NHS fell by 0.02% in 2011-12 and 0.69% in the fiscal year before that. I understand that those are small percentages, but we are dealing with a budget of £105 billion, including the capital element, and I think the public would be concerned because those sums are not insignificant. Those percentages equate to £740 million over two years, and we should think about what that money could buy. In my area, one of the first schemes to be cancelled when the coalition came to power was a new hospital. It was not funded through a private finance initiative but through Department of Health capital resources. That hospital would have cost £464 million, but we are still waiting for it. The figures I mentioned would have built two such hospitals.

David Ward: When talking about budgets, the focus is all on integrating health with social care, so we cannot really consider the overall picture unless we also look at local authority budgets.

Grahame Morris: That is an excellent point, and my hon. Friend the Member for Worsley and Eccles South mentioned evidence presented to the Health Committee that showed that £2.7 billion of expenditure or allocations has been removed from local government budgets and social care. That has had a huge impact on the service and resulted in changes to eligibility and thresholds, and charges for transport and other things.

Jim Cunningham: I apologise to my hon. Friend for arriving a minute after the start of his speech. The hon. Member for Bradford East (Mr Ward) raised an interesting point about social care, particularly in relation to local authorities. Given the one-third cut, plus the 10% cut, in those budgets, I see a major
	problem for local authorities in buying care for elderly people. Indeed, it has been a major problem over the past two or three years.

Grahame Morris: That is an excellent point. I am sure that Members across the Chamber will have experience of that. On Friday gone, we had a crisis meeting of the county MPs and senior politicians in my local authority area of County Durham to determine how to cope with a further tranche of cuts. The situation is becoming serious. It is said that the allocations have been ring-fenced, but the local authorities’ discretionary spend is all being absorbed into social care and expenditure for children and the elderly, and there is very little room for manoeuvre.

Kevan Jones: Will my hon. Friend give way?

Grahame Morris: I will give way to my hon. Friend.

Dawn Primarolo: Order. The hon. Member for North Durham (Mr Jones) has only just come into the Chamber. Interventions are normally about facilitating those who have heard the debate, and it is not appropriate just to walk in and intervene. The hon. Gentleman is experienced enough to know that that is the case.

Grahame Morris: Okay—

Kevan Jones: Will my hon. Friend give way?

Grahame Morris: Am I allowed to give way to my hon. Friend, Madam Deputy Speaker?

Dawn Primarolo: This is a timed debate. The courtesies of the House, which have been circulated to Members of Parliament a number of times, are not about walking in, spending a few minutes in here, then intervening. Of course the hon. Member for Easington (Grahame M. Morris) can give way if he chooses to do so, but he might want to bear in mind that other Members who have been in the Chamber for some time are still waiting to speak. That was the point I was making.

Grahame Morris: With all due respect, Madam Deputy Speaker, I know that my hon. Friend was at the same meeting as me on Friday, and he will probably have a relevant point to make about that, so if you do not mind, I will give way to him.

Kevan Jones: With respect to the Deputy Speaker, the point I wanted to make was that at the meeting last Friday we were told that Durham county council has to take £210 million out of its budget. Does my hon. Friend think that areas such as ours, which has a growing elderly population, will face more pressure than some others?

Grahame Morris: Absolutely. The pressures are becoming intolerable. Some of our great northern cities, such as Liverpool and Middlesbrough, seem to be shouldering a disproportionate share of the cuts, and it is a difficult task to try to balance the budgets and deliver the services that people require. There has been a
	discussion about whether the councils are in a position even to deliver their statutory requirements.
	As the right hon. Member for Charnwood said, the NHS has been set productivity targets of 4% per year, as the Government seek to make savings of £20 billion over the lifetime of this Parliament. As the report identifies, the Government believe that those savings can be made in part by prioritising competition over co-operation. I find that questionable, and we need a cost-benefit analysis of the consequences in regard to the value for money of outsourcing. There has been a lot of criticism of PFI schemes, and questions have been asked about whether they provide value for money for the public purse. To date, efficiencies have largely been achieved by freezing staff salaries and cutting the tariffs paid to NHS providers. Neither of those is sustainable, and both fail to meet the spirit, if not the letter, of the Nicholson challenge.
	There are signs of falling morale in the NHS, and that is due in no small part to the Government’s attacks on pay, pensions and conditions of service. It is not helpful that Ministers seek to blame NHS staff for problems caused by the Government’s cuts and reforms. These are not the innovative changes that we need to see from a restructured NHS. In the main, we are seeing the picking of low-hanging fruit. Some of the cuts are rash and damaging, and they are being made to satisfy the Government’s need for cuts across the board.
	I understand that the current Secretary of State for Health has joined his predecessor in receiving a vote of no confidence from the health care professionals at the British Medical Association conference. I only hope that the next Secretary of State for Health will seek to work with health care professionals, not against them.
	The NHS Confederation’s survey of NHS chief executives indicated that 74% of respondents believed that the NHS’s financial situation was either the worst they had ever seen or “very serious”. Despite the Government’s claim to have ring-fenced funding, which has been called into question, NHS executives are not confident that the situation they face is good for their organisations or their patients, with 85% expecting things to get worse in the next fiscal year.
	There is no doubt—the figures are there in the report—that the NHS is facing the biggest financial challenge for a generation, as a result of unprecedented demographic changes, an increasing demand for health and care services, co-morbidities, and people living longer with chronic illnesses such as diabetes and dementia. The Nuffield Trust has warned that, unless we improve the way in which services are delivered, growing care needs will result in a shortfall of up to £29 billion a year in NHS funding by 2020.
	The NHS faces new challenges in the 21st century. The last Labour Government corrected the chronic under-investment following 18 years of the previous Conservative Government. Investment in the NHS trebled under Labour. We built more than 100 new hospitals, replaced much of the ageing infrastructure, and developed the new walk-in centres, primary care centres and a new generation of modern community hospitals. There were extended GP opening hours, and more doctors and nurses than ever before.

Jim Cunningham: Does my hon. Friend agree that, unless something realistic is done about the health service, we could find ourselves back in a pre-1997 situation, with a shortage of beds and with people sleeping on trolleys?

Grahame Morris: I am grateful to my hon. Friend for that intervention. There is certainly a crisis in emergency care. The causes of that are multi-faceted, and I certainly do not agree with the Secretary of State’s analysis that it is simply the result of the change in the GP contract in 2006. Some of his comments to that effect have caused great offence to the medical profession. We are in crisis in many respects, including in the area of recruitment. It has been pointed out in recent evidence to the Select Committee that the NHS is not recruiting enough people into emergency care, or enough GPs. We are storing up bigger problems for the future if we do not have the necessary cohorts of trainees going through medical school.
	A new approach is needed if we are to meet today’s challenge of the rising demand for health care in an ageing society. We will certainly need more co-operation, not more competition. We will need to see the integration of health and social care services, not more fragmentation, and we will need more whole-person care. In many respects, the Government’s reforms will make that harder, with markets fragmenting services and an open-tendering free-for-all meaning more providers dealing with smaller elements of a person’s care, without the necessary overall co-ordination.
	We know about joint budgets. We have seen the Government transfer resources from the NHS to social care. However, what we need is a single budget. I should like to see a national health and care service, a co-ordinated service that focuses on an individual’s physical, mental and social care needs from home to hospital. We need a new focus on prevention: people who are at risk of being admitted to hospital should be identified and supported in their homes. The Select Committee has been looking into the policies and interventions that have enabled that to be done in other countries. We need to end costly migrations from home to hospital, and from there to expensive care homes where, in many cases, the individual must bear a huge financial burden. That is good for neither the taxpayer nor the individual. The integration of services will allow significant savings to be made. Investment in early intervention will limit more costly hospital admissions, as well as helping people to lead healthier lives.
	There is a real choice. While the coalition Government are pushing for a free market in health care, Labour is calling for the full integration of health and care services. While the coalition talks of choice, it is delivering fragmentation. In contrast, Labour supports co-operation between doctors, nurses, social workers and therapists, all working together with a single point of contact.
	There are huge risks, and the first news stories about them are beginning to surface. If we do not deal with the present situation, the need for fees may arise, and we may end up with a two-tier system. Top-up payments for treatment may be required, especially as more private companies enter the market. We may even see the re-emergence of an insurance-based free-market private health care system. I believe that we should remain true
	to the founding principle of the NHS: that it should be a health service funded from general taxation and provided free at the point of use. Ministers may shake their heads, but they should remember their last promise, that there would be no more top-down reorganisations.
	The NHS, whose 65th birthday we celebrate this weekend, is Labour’s greatest achievement. We created it, we protected it, and we saved it after years of Tory neglect and under-investment. We must continue to protect and transform our most cherished public service, so that we can meet the challenges that we face in the future.

John Pugh: It is an honour to follow the hon. Member for Easington (Grahame M. Morris). We all appreciate his style, even if we do not share his conclusions and his fears. Let me also congratulate the right hon. Member for Charnwood (Mr Dorrell) on the Health Committee’s excellent report. Indeed, I congratulate all the Committee’s members, who must be among the most diligent and assiduous members of any Select Committee in the House, and many of whom are in the Chamber now.
	On the occasion of our last debate on the estimates, I made the huge strategic mistake of trying to talk about the estimates, and was ruled out of order for doing so. That was a schoolboy error. I shall therefore draw a veil over the £50 billion of expenditure that we are notionally considering, and limit myself to a few brief observations.
	The bottom line is that the NHS faces huge demographic and financial problems. Having wasted two years reorganising it, we have now secured universal agreement on what we must do. The way forward seems clear to me, and it seems good. We must integrate care, reduce the cost burdens on the acute sector, and remodel the acute sector to allow that to happen. We must encourage self-management and co-management of chronic disease. As was pointed out by the hon. Member for Easington, we must encourage local co-operation. We must share data: that is very important, but it has not been mentioned so far. We must pool resources—that has been mentioned—and develop networks for the treatment of strokes, cardiac conditions, cancer and so on. No one disagrees in the slightest with that analysis.
	There is general support for personal health budgets, which were mentioned by the hon. Member for Bosworth (David Tredinnick), although it is not entirely clear whether they will complicate or solve the financial challenges that we face. There are other no-brainers on which we happily agree. We want to encourage medical research, and we want better public health.
	The goal is clear, and there is little argument about it in the Select Committee or in the House. What is not clear, however, is exactly how all this is going to happen. We refer frequently to a string of laudable actions: empowering patients, conducting pilots, providing incentives for integration and co-operation, issuing mandates—that is rather a new thing—setting quality standards, establishing frameworks, and commissioning services. A word that we do not use much however—although it was heard in the speech of the hon. Member for Easington—is “management”. That has become almost a discredited word. We talk about disease management, but we are less happy to talk about system management, except
	when we talk about micro-management. The sin of non-delegation is clearly a bad thing, but references to management tend to occur only in that context. We boast about culling managers, but what we need now is good executive management. If we are to implement the aims to which we have all signed up, we shall need not more managers, but better management and better managers.
	Ministers, and Governments in general—all Governments—have recently been rather good at thinking up policies, making announcements and changing structures, labels and names, but at times they appear to have forgotten that the main business of Government is to govern, and to engage in the day-to-day business of making things happen. They neglect the day job, or become unaware of the need to carry it out. That is the reason for the constant gap between announcement and delivery. That is why there is all the teasing at Prime Minister’s Question Time about programmes that are announced but not implemented.
	I was delighted when the Secretary of State sent Department of Health officials into hospitals for work experience, so that they could observe real-time implementation. The Under-Secretary of State himself has real experience of hospitals, and knows what it is like to suffer under the policy mandates of a variety of Governments. However, there is a vacuum at the moment. There is a lack of local levers, which prevents us from achieving the integration at local level that we want. There is a gap in local leadership, especially when it comes to making integration happen. There are more organisations around, but there is less strategy control and command. As we heard from the hon. Member for Easington, the strategic health authorities have gone.
	When taken to task about problems of that kind, many people—including, possibly, the members of the Health Committee—cite the health and wellbeing boards, saying that they are crucial to making it all happen and bringing it all together. I wish them luck and I hope that they can do that, but they are a variable mix at present. They are not kitted out or resourced to be proper health boards. They have no genuine executive power, no budget and no real authority.
	We need people who can get the local networks right, get the parts of the NHS machine working together, and ensure that procurement is organised rationally, data are shared, resources are pooled and good practice is spread. We need people who can get a grip on the new agenda and see it through. However, on the current landscape, it is not obvious who those people are, or whether they have the capacity to do what is needed.

Stephen McCabe: I recognise that there is almost no prospect of a return to the 4% annual rises in the health economy that we had got used to, and the right hon. Member for Charnwood (Mr Dorrell) explained the impact on income tax of such a move. The Institute for Fiscal Studies reported that to return to that would require a budget freeze on every other Government Department for the foreseeable future, even allowing for significant growth in our economy. We have to recognise that the NHS will have to make do, therefore.
	The NHS is currently halfway through finding efficiency savings of more than £16 billion up to 2016. The savings are coming primarily from pay restraint, administrative cuts and reductions in centrally determined payments. In the long run, pay restraint may lead to a shortage of essential staff and, of course, poor pay and conditions is a factor in the poor-quality social and residential care we already see. As my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) pointed out, social services directors say that reductions in payments to care providers are leading to a fall in the quality of the care they are able to commission, and that often leads to a cycle of admissions to hospital.
	Although it is politically convenient to scapegoat administrators, even the Minister must recognise that there is a limit to efficiency savings in administration. In these circumstances, the decision to waste so much on a top-down reorganisation now looks a little stupid.

Richard Fuller: The hon. Gentleman has raised the issue of low pay in certain sectors. He will know from the evidence of the Select Committee report that 16 of the 42 trusts stated that pay amounts to at least 50% of the total cost pressures. Does he think there is a case throughout the NHS for looking at managing down the pay of the more highly paid, so that those on the bottom can get higher increases?

Stephen McCabe: There is some merit in looking at that, but when the people at the top end are scarce, we must be careful not to lose them to other countries. That is a challenge.
	Today’s announcement about charging foreign nationals was strange in the sense that it seems to undercut existing private providers such as BUPA. I am not quite clear how that will save money. I fear it is the kind of posturing that may well end up costing us money, rather than saving money.
	Like others, I welcome the Chancellor’s decision to allocate £3.8 billion to the joint NHS social care budget, but I would like to know an awful lot more about how it will be allocated and spent. In particular, I would like to know how the Minister hopes to measure its impact on medical services such as accident and emergency and hospital beds.
	I would like us to have a statement on the proposed pathfinder integrated care pilots, because many of us are curious to know where that is going. It seems to me that there is not an awful lot of point in proclaiming the virtues of pooled budgets unless we know exactly what the Secretary of State thinks he is going to achieve. We have an idea from the Health Committee about where it thinks that might go, and the shadow Secretary of State has sketched a vision, but so far we have had an announcement from the Chancellor about making money available yet we do not have any idea what the Secretary of State hopes to achieve through that measure.
	I would like to make one suggestion to the Minister: he should take a look at the home from hospital care service, which I understand operates in several parts of the country, and which was inspired by the work of Geraldine Amos almost 40 years ago now. In Birmingham, that service helps people move from hospital back into their own home and community and, of course, frees up
	hospital beds. It is quite a limited service in Birmingham at present, as it is currently financed by a grant from Birmingham city council, and I am not sure how much longer that will last, given the pressure on local authority budgets. That is, however, one example of how quite a small amount of money can be used to make quite a big impact in getting people back and settled at home, and trying to stop repeat admissions and bed-blocking. The recent NHS Confederation survey of chairs and chief executives revealed that 50% of respondents believed that the financial pressures have affected waiting times and access in the past 12 months and that 70% believe that waiting times and access will be affected by the continuing financial pressures in the next 12 months. So it is slightly strange that we have heard so little from the Government about how they plan to redesign services so that they are able to unlock more sustainable efficiencies for the future.
	Given the answers I have received to some written parliamentary questions, my impression is that far from having a vision for the NHS, Ministers are seeking to evade responsibility for it. I have lost count of the number of written answers I have received advising me to contact this body or that body when I have asked the Minister for basic information and figures. We need a bit more clarity about the Government vision, and local communities and their representatives, including local and national politicians, should be properly engaged in that vision. That is one area where we could all be in it together; we could all be party to some kind of change programme, which would help us to redesign the services and to plan an NHS that will have to operate with fewer resources in future.
	My recent experience of trying to obtain straight answers on the future of the NHS walk-in centre at Katie road in my constituency does not fill me with any optimism. Why on earth should clinical commissioning groups be allowed to keep private and secret a report on the future of walk-in centres, given that the report was not even commissioned by them? Why should the local Members of Parliament not be given access to that report? Why on earth set up a body such as HealthWatch if it does not get automatic access to it?
	I would really like to know a bit more about that Government vision, and I would be particularly interested to know what they want to do to manage some of the growing pressures to which hon. Members have referred. I would like to know the Government’s policy with regard to the greater prevalence of long-term conditions such as diabetes and dementia. Like the hon. Member for Southport (John Pugh), I think it is hard to see the impact of health and wellbeing boards in that area, not because they are not bringing the right mix of people together, but because their chairmen are currently engaged in a line-by-line review of budgets designed to exclude everything that is not a statutory obligation. It is difficult to see how such bodies will be the ones with vision about long-term conditions when that is the level at which they are currently operating.
	The Secretary of State should give a clear commitment to tackling the problem of conflicting incentives in the NHS. Acute trusts are paid for their activity through the tariff, while primary care and community care is paid through block contracts which actually serve as a disincentive to activity. I welcome the news that Monitor and NHS England are to examine this problem, but we need some response to it fairly quickly.
	In conclusion, I recognise that we are discussing the estimates made possible by the economic circumstances of the country, but it remains the responsibility of the Secretary of State to provide vision and leadership for the NHS, even in such difficult times.

Priti Patel: I welcome today’s debate and I, too, want to pay tribute to my right hon. Friend the Member for Charnwood (Mr Dorrell) for his comments. He clearly made some strong and valid points about expectations of the NHS and the required pre-requisite of expectation management. Yes, the debate is about funding and finance, but it is also about some of the significant challenges we face as a society and a country because of our changing demographics and our ageing population.
	I pay tribute to the Government for prioritising investment in the NHS and in health and social care and for committing to increase spending on the NHS and health to more than £115 billion for the next comprehensive spending review period. I also welcome the measures they have introduced to focus resources on the front line and in particular to clamp down on NHS bureaucracy—my hon. Friend the Minister will know my views on that. I believe that the importance of making £20 billion of bureaucratic and efficiency savings should not be underestimated.
	As we have heard, increasing demand on services requires more spending, but targeted specifically at the front line. In my constituency, a scandalous deficit in health care provision built up while Labour was in power as resources were soaked up by NHS bureaucracy. Across the former East of England strategic health authority, the number of senior managers doubled between 1997 and 2009 from 1,300 to 2,700.

Kevan Jones: Does the hon. Lady think that there has been any sense whatever in the top-down reorganisation? I know that in many areas managers have taken large redundancy payments from primary care trusts only to be re-employed weeks later by GP commissioning groups.

Priti Patel: The answer to the hon. Gentleman’s question is yes. In the east of England, and certainly in Essex, there have been significant changes. The change to the structure has been specifically welcomed because resources are now going to the front line, which, for my constituents, is the most important thing.
	The numbers of administrators and managers grew vastly in the PCTs that used to cover my constituency. I am afraid that we did not have one PCT—we had several. The number of managers and senior managers at the Mid Essex primary care trust and its predecessor trust increased tenfold from 10 to 102, while at the North Essex primary care trust the number went up from 25 to 84. By the time the Labour party was kicked out of office by the British public, the proportion of administrative staff had risen to one third, and between those two PCTs something like £25 million was spent on management costs alone—money that could have been much better spent on providing front-line services to my constituents and to constituents elsewhere in Essex and across the eastern region.
	Although bureaucracy increased, health service provision in Witham town suffered as NHS managers completely neglected the area in favour of spending money elsewhere. As a result, Witham town’s GP surgeries are bursting at the seams. Almost 30,000 patients are registered across four practices with just 13.5 full-time equivalent GPs. That means that there are 2,200 patients registered per GP, nearly 50% more than the national average of 1,500 patients per GP.
	My constituents report that they are struggling to register with a GP and are facing insufferable delays in getting appointments. One wrote to me, saying:
	“Two doctors’ surgeries in Witham have refused to take me on, because the books are closed for new patients.”
	Another said that they
	“waited 12 days for an appointment with my GP. In the end, I was diagnosed with appendicitis.”
	Unfortunately there will only be more such cases, exacerbated not just by our changing demographics but by housing growth, which creates greater pressures on existing practices. On Witham’s Maltings Lane estate, 1,700 new homes will be built, increasing the local population by more than 4,000. Other sites have been identified for development over the next decade, quite rightly bringing new homes and affordable homes to my constituents.
	When Labour was in power, opportunities to bring in new medical facilities through section 106 agreements and other funding arrangements were completely spurned by the PCT managers, who neglected and ignored the situation and the strains of a growing population in the community. New GP practices could have been opened and new facilities to provide treatments and assessments could have been brought in to save my constituents from travelling to Chelmsford, Colchester or even Braintree, which involves considerable distances. That demonstrates how patients in my constituency were not being put first. It was bureaucracy that was being put first by the army of bureaucrats in charge of running the local NHS in my part of Essex at that time.
	The Minister will understand the legacy of problems left to the town. I also pay tribute to him—like the Secretary of State, he has received a fair amount of correspondence and is well aware of the issues. One of the biggest challenges for the NHS today, with the increased investment that it has, quite rightly, received from the Government, is ensuring that the savings in bureaucracy that this Government are making are reinvested in proving new local health care services in Witham in particular. I hope that my hon. Friend will give a commitment to support our local efforts to increase health care provision in Witham, to ensure that my constituents of today and those of tomorrow, gained through new housing growth in particular, receive and benefit from a 21st century health care service.
	With more money than ever being invested in the NHS, it is essential that those who are responsible for spending decisions and run our local NHS are also held to account. Accountability and transparency are key. We in the east of England have had from our ambulance trust the worst ambulance service in the country. It was run by a board of non-executive directors who failed to provide the trust with the leadership, skills and expertise required to address endless shortcomings and delays in ambulances attending to patients. Lives were put at
	risk, but despite the failures, a damning governance review and a “failing” report from the Care Quality Commission, the board bit the bullet and resigned only last Friday morning, following substantial pressure from MPs in the east of the region, including my hon. Friend the Minister, and a Westminster Hall debate last week. The situation was shameful and scandalous, because the board refused to go until the pressure became too much for them.
	None of us can avoid the need for accountability and transparency. We have seen in Mid Staffordshire with the Francis review, in Cumbria, in the East of England with our ambulance trust, and now with the Tameside hospital trust—I think the chief executive resigned this afternoon—what can happen when NHS managers and directors get it wrong. They have to be accountable for their failures. Transparency is required. I recognise that the Government are taking this seriously and hope that at the end of the debate my hon. Friend the Minister will give details of steps that will be taken to remove failing directors and managers and, importantly, to replace them with people who have the skills and capabilities to put patients first and to deliver value for money. A huge amount of taxpayers’ money is used to pay for the NHS. It is only right and proper that all of us, including the public, should feel confident that the money is being well spent.

Phillip Lee: The nature of this debate is such that one can talk about anything to do with the NHS, be it local or national, in the context of the estimates of costs. The figures in the documents are immense—£1 billion here, £50 billion there; perhaps we need to plant some money trees in this country—and will only increase, as we all know. It has been interesting to listen to Members on both sides of the House this afternoon. Everybody accepts that demands are rising. Obesity is increasing—26% of adults are obese and the proportion is rising—and our population is ageing, so that by 2030 almost 25% of the population will be over 60. On top of that, there are advances in medical technology and the costs thereof to deal with—today’s cancer drugs can cost upwards of £5,000, £6,000 or £7,000 per month per patient.
	Given those demands and costs, maintaining the current service will inevitably become nigh on impossible. I sense, even in the Chamber, and certainly outside it, that the public are beginning to realise that. I will say a few words about that before going local and discussing some of the things I have been suggesting in my region, and “region” is the key word here, rather than constituency.
	The figures are really quite shocking. It has been suggested that by 2025 around 25% of the NHS budget will be spent on type 1 and type 2 diabetes alone. Only this morning a colleague told me that he had been diagnosed with type 2 diabetes. It affects all groups in society. Around 21% of the population smoke and around 28% of the adult male population drink too much—the figure is about 20% for women.
	The number of prescriptions in 2009 was 886 million. The total cost of the NHS drugs budget in 2009 was between £13 billion and £14 billion, and it increases by £600 million each year. We are getting cleverer at inventing
	new drugs and classes of drugs, so I suspect that those costs will continue to increase, because it is human nature for someone to want the very best drug, the drug that will cure their cancer or extend their life.
	Cases of dementia are set to double over the next 10 years, which will have a profound impact on health and social care. There will be a huge impact on the economy, as families will increasingly have to spend more time looking after the vulnerable, rather than going to work. The ramifications are immense.
	I have detected some recognition in the Chamber today, particularly from my right hon. Friend the Member for Charnwood (Mr Dorrell), that there needs to be some cross-party agreement on this. I suspect that we will be arguing over the next 10 to 15 years about how we pay for health care. I have been brave enough to suggest that relying solely on general taxation to fund health care is not practical in the medium to long term. It is difficult politics—trust me, I saw my Twitter account explode at that point—but I think that we are likely to have a debate on that, and an argument, across the House, and that is as it should be.
	However, where we should not disagree is about the way health care is structured in this country. I think that for both parties—it is a plague on both houses—the introduction of the market into hospital health care and the use of private finance initiative contracts, particularly over the past 10 years, has made it extremely difficult to reconfigure hospitals in certain parts of the country, which is unfortunate.
	I have also heard that the introduction of competition law and its possible implications with regard to reconfiguration is also looming large in the national health service. Government Front Benchers might want to look at that, because I am persuaded—I have spoken about this on many occasions—that in future we will need fewer acute hospitals but more community hospitals. The majority of care will increasingly be offered closer to home, or indeed in the home, but the clever stuff, such as the life-saving stuff shown in the television series that the BBC is currently broadcasting on Thursdays, cannot and will not be offered in the number of district general hospitals that we currently have. Anybody who thinks that it can be does not understand. I suggest that it is increasingly becoming good politics to save lives, not to defend the indefensible, and I think that Members on both sides of the House should reflect on that.
	One example from that television series was a nasty accident involving a head-on collision 30 minutes north of Addenbrooke’s hospital. The injured did not go to the local hospital, which had recently opened, because it could not care for them; they went 30 minutes down the road to be treated at Addenbrooke’s-. In other words, a hospital that had been built in the past few years was already not fit for purpose. We should reflect on that.
	Reconfiguration is essential, and it has been shown—not least in respect of London stroke services—to save lives and improve care. That should be replicated across the country.

Kevan Jones: The hon. Gentleman is speaking a lot of sense. The stroke unit in the north of County Durham has just been specialised, and the results are already showing the benefits, although in parts of the region there was a lot of opposition to the move.
	Does the hon. Gentleman think that long-term health should be managed not only by doctors but by pharmacists and others, who can play a key role?

Phillip Lee: I am pleased that services are improving in County Durham; as the hon. Gentleman knows, I have family roots in his part of the world that go back centuries. I am not persuaded of the role of pharmacies, although I am persuaded of the role of pharmacists. I distinguish between the two because I personally think that all GP surgeries should be dispensing drugs. I do not see why the taxpayer should be subsidising pharmacies.
	It is no surprise to me that Boots was the biggest ever private equity buy-out in the history of British industry, given that the taxpayer is outside the front door: “Come here for your amoxicillin, and while you’re here you can get your shampoo, conditioner and royal jelly.” I am not convinced about the role of pharmacies in the longer term; pharmacists most certainly have a role and should be included. Community pharmacists should be checking drugs, particularly when patients have polypharmacy—when they have a multitude of medications, another pair of eyes is always appropriate.
	To return to the reconfiguration, in my locality we have a number of district general hospitals. Historically, Bracknell itself has been under-served by acute services since it was created in the late ’50s or early ’60s. We have seen services diminish in the area for a variety of reasons and under Governments of both parties, and we are sensitive about that.
	Before I was elected as Member of Parliament for Bracknell—I stress that it was before I was elected—I suggested as part of my campaign that we needed to close hospitals in the area and consolidate to improve clinical outcomes. I am not aware that my result at the election was adversely impacted by that. Having worked in the area as a GP for a number of years and looked after 50,000 patients, I guess that people trusted what I was saying, and I recognise that.
	I was trying to argue that we could consolidate acute services on a single site and improve community hospital services in appropriate locations around the region. I stress the word “appropriate”, as the problem is often that, for a variety of legacy reasons, hospitals are in inappropriate locations. They are not often on motorways, but on land bequeathed before the war. In my part of the world, the Astor family bequeathed the land for Heatherwood hospital. The local farmer outside Slough bequeathed some land because his daughter was looked after well. People thought, “Okay, we’ll build a hospital in the middle of a farm field nowhere near the population that it seeks to serve.”
	There is a legacy problem. There is some need to close and relocate, while in some parts current locations can be enhanced. In my locality, there is the problem with Heatherwood hospital. I must put on the record something bizarre that frustrates me. It is “blue on blue”; if I was in a defence debate, it would be called friendly fire. The Royal Borough of Windsor and Maidenhead has called for a judicial review of the relocation of a minor injuries unit just three miles down the road, would you believe, to Bracknell—an urban centre in a better location and away from a place opposite the Royal Ascot racecourse. That judicial review will delay the move and cost money. I find that baffling and bizarre. It is evidence of the problem that I guess all
	colleagues of both political colours experience in local politics with regard to health care and trying to change services for the improvement of clinical outcomes, because it is not about cost, although obviously that is a factor, but about improving clinical outcomes. That frustrates me, and I will certainly be dealing with it robustly in local terms. At the moment, it is in the best interests of the general public to have fewer acute hospitals.

Andrew Percy: My hon. Friend is making an interesting point. Does he agree that in applying solutions such as those he is espousing, we must be careful that we do not apply an urban solution to rural areas? Moving an A and E three miles might be acceptable, but moving it 30 miles would not be acceptable to a lot of us.

Phillip Lee: My hon. Friend is right: in a rural location the distances become further. I do not know the particular situation in his region, but I would suggest that there are probably location issues with regard to existing hospitals.
	Moving neatly on, that is why—yes, you heard it here first: a Conservative calling for a Soviet-style central plan—I have called for a national plan for acute and emergency care. By definition, we cannot have a market interfering in that; we need to look at it in the round and say, “Where would we put these hospitals? Where are the motorways? What is the population density? Where is the rural location? Where is the urban location?” The problem is that if we reconfigure in isolation—I have seen this locally—it has a knock-on effect on other hospital services which then say, “Where are we getting our patients from?”
	We should have a national plan that everyone from both parties has bought into. We should have—dare I say it?—a cross-party party committee looking into this. We should take it out of the political exchanges that we all engage in. We know what is going to happen in certain quarters in 2015—it will become a political football. I know that my hon. Friend the Minister is very aware of this. That is dreadful when we are talking about saving lives. Let us try to take this out of party politics. We can have robust exchanges, on principle, about payment, about how services are commissioned or not commissioned, and about whether there should be top-down reorganisation, but the fundamental question of where hospitals—acute and community hospitals—are located should be decided nationally; otherwise we could have perverse decisions whereby some services wither on the vine and we end up with gaps in emergency and acute care across the country. I make a plea for some cross-party activity on this.
	Let us put the national health service’s budget into context. This country has debts and liabilities in excess of five times the size of our economy, and the situation is getting worse. Almost 40% of spending is on health and welfare, and it is growing. We know that that will happen; we have heard it this afternoon. Let us be realistic: there is only so much we can afford. I genuinely want a service that is based on clinical need. I genuinely want somebody to arrive at the appropriate location and get the very best care available. I fear that if we continue along this path of denial as regards how the service is paid for and, more important, structured, we
	will end up with more and more scandals. There are more in the pipeline. The chief executive of Tameside hospital has just resigned.
	The public out there want more from us. They want us to make some difficult decisions, for sure, but using evidence, not party politics. I make that plea to everybody. If we can do that, we can structure a service that becomes the envy of the world; it is not that at the moment. However long I end up staying in this House, if that is achieved in the time I have been here, I will retire a happy man.

Lindsay Hoyle: Before I call the Front Benchers, may I remind Members that if they are going to bring mobile phones into the Chamber they must be on silent and that they should not wait for them to ring? This is not the first time I have said that, but I certainly want it to be the last. Has the hon. Member for Strangford (Jim Shannon) taken that on board? Excellent.

Andrew Gwynne: May I begin by thanking the Health Committee and its Chairman for the report and the clarity with which he presented its findings, and Members from all parties for the thoughtful way in which they have debated the issues today? The right hon. Member for Charnwood (Mr Dorrell) is known for his diligence and attention to detail, and his speech clearly illustrated those instincts.
	Before I address the points raised by the report, let me put on record our gratitude to the many thousands who work in our health service. As we approach the 65th anniversary of the NHS, we should take a moment to pay tribute to those staff who are doing a tremendous job, often in difficult and challenging circumstances.
	With the indulgence of the House, I would also like to place firmly on the record my support for and appreciation of the dedicated doctors, consultants, nurses, carers and support staff in Tameside general hospital, many of whom will be feeling battered and bruised today. Tameside general hospital serves most of my constituency and today’s media reports highlight some of its failings. Deep-seated issues need to be grappled with urgently, but we should also recognise and listen to the many decent, good and hard-working staff who work there, because they often have many of the solutions and have not been listened to in the past.
	I also apologise for leaving the Chamber briefly during the speech of my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley). There was no discourtesy intended to either her or the House: I was dealing with the BBC’s breaking news that both the chief executive and the medical director of Tameside general hospital have resigned, which I support. Sadly, it has come three years too late—I called for it to happen three years ago—but, nevertheless, it is a step in the right direction to ensure that Tameside general hospital has a safe and secure future.

Barbara Keeley: We heard from the hon. Member for Southport (John Pugh) about the value of executive leadership. Our conurbation of Greater Manchester has one of the best and safest hospitals in the country.
	The Salford Royal hospital is the seventh safest in the country and has an excellent chief executive. Today the leadership of Tameside hospital has changed and I hope that the people of Tameside will end up with an excellently led hospital. I agree with the hon. Member for Southport. My example shows the difference between a hospital that is well led and one that is not.

Andrew Gwynne: I agree with my hon. Friend. Had she been listening to BBC Radio Manchester this morning, she would have heard me making precisely that point. The situation at Tameside is incredibly frustrating for me and my hon. Friends the Members for Stalybridge and Hyde (Jonathan Reynolds) and for Ashton-under-Lyne (David Heyes). Whenever we meet the chief executive and chair of Tameside hospital—we do so frequently—they always give us excuses as to why Tameside is different from the rest of Greater Manchester because of the industrial legacy and poor health outcomes in the borough, but one could make exactly the same arguments for Salford: there is no reason why one part of Greater Manchester should have an excellent hospital while another has one with long-term problems.
	Following that slight indulgence, I want to turn to the report and focus on four key areas. First, the right hon. Member for Charnwood made some pertinent points about the Nicholson challenge. To be fair, in previous reports the Health Committee has taken the consistent view that the Nicholson challenge can be achieved only by making fundamental changes to the way in which care is delivered. It makes that argument in this report too. It states:
	“Too often…the measures used to respond to the Nicholson Challenge represent short-term fixes rather than long-term service transformation.”
	The Select Committee is right about that.
	If we are to sustain the breadth and quality of health and care services, we need a fully integrated approach to commissioning—something that the right hon. Member for Charnwood and others have spoken about powerfully. The Opposition agree with that. I hope that the right hon. Gentleman will agree that we have put forward bold proposals for a genuinely integrated NHS and social care system that brings physical health, mental health and social care into a single service to meet all our care needs.
	We know that that approach works. In Torbay, integrated health and care teams have virtually eliminated delayed discharges. Partnerships for older people have helped older people to stay living independently in their own homes and have delayed the need for hospital care—something that my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) rightly referred to. Where physical and mental health professionals have worked closely together, they have shown that a real difference can be made.
	An integrated, whole-person approach is the best way to deliver better health and care in an era when money remains tight. As the Committee’s report notes,
	“the care system should treat people not conditions.”
	The right hon. Member for Charnwood was right to point out that developing the role of health and wellbeing boards is the best way to plan such integrated care. He reaffirmed that he is “happy to endorse” the Burnham plan. We were happy to hear that. He is right that there is an issue with single commissioning budgets without
	checks on local government. As somebody who has a background in local government, I think that he is right about the need to extend the ring fence to social care spending. Unless those budgets are protected, there will be a temptation to siphon off the money that is needed to provide the integration that we all want to see.

Stephen Dorrell: I do not want to detain the House, but will the hon. Gentleman confirm that the Opposition support the proposals set out by the Chancellor last week that will provide exactly that principle?

Andrew Gwynne: I will come on to the Chancellor’s proposals. We do have concerns because there is an immediate care crisis that needs to be tackled now. There are also wider issues. My hon. Friend the Member for Worsley and Eccles South rightly raised the concern of local government that it will not have the funds to implement the new requirements in the Care Bill. We need reassurances about that.
	My second point is about the cost of the Government’s reorganisation, about which my hon. Friends the Members for Easington (Grahame M. Morris) and for Birmingham, Selly Oak spoke eloquently. In the update from the Government last autumn, the overall cost was up by 33% or £400 million, making a total of £1.6 billion so far. What is that money being spent on? A full £1 billion has been spent on redundancy packages for managers, 1,300 of whom have received six-figure pay-offs and 173 of whom have received pay-offs of more than £200,000, all while the number of nursing posts has been cut by more than 4,000—six-figure pay-outs for managers; P45s for nurses.
	The really unfortunate thing is that the reorganisation has diverted money and attention away from the front line. The Committee’s report notes that the reorganisation has
	“had an impact on the NHS budget”.
	I do not want to get into that debate. I will leave it to the UK Statistics Authority, which confirmed that spending on the NHS was lower in real terms in 2011-12 than in 2009-10, albeit marginally. We have seen reductions in NHS spending. Mental health spending has been cut in real terms for two years running, cancer spending has fallen in real terms and social care budgets have been slashed.
	Let me now turn to the funding crisis in social care. The Library’s analysis, which is borne out by the Local Government Association’s statistics, shows that Government funding reductions have forced local authorities to reduce their adult social care budgets by £2.7 billion over the last three years. They have had to slash services and increase charges in order to balance their books, leaving thousands of vulnerable older and disabled people facing a daily struggle to get the care and support they desperately need.
	That is why what the Chancellor announced last week in the spending review is at best a sticking plaster, or if I am feeling generous, a plaster cast. Sadly, it will not solve the financial pressures on councils, break the flow of funds into the acute sector or address the fundamental problem of two systems operating to conflicting rules.
	To be fair, the Government have started talking Labour’s language of integration—the right hon. Member for
	Charnwood would say that it is the Select Committee’s language—but as the Committee notes, the only way to achieve what we want to see is by making fundamental system changes, which brings me to my final point, which is the Department of Health underspend.
	I note that the Committee has raised concerns about the operation of the Department of Health policy on underspends and budget exchange. The small print of this year’s Budget revealed that the Department of Health is expected to underspend against its 2012-13 expenditure limit by £2.2 billion. That would be the biggest underspend of any Department in this financial year. Page 70 of the Budget document appears to show that none of this has been carried forward to be used in subsequent financial years as part of the Budget exchange programme. Perhaps the Minister could explain why—at a time when the NHS is facing its biggest financial challenge, when 4,000 nursing posts have been lost and when there is a crisis in A and E—they have decided to hand the full £2.2 billion back to the Treasury. Can the Minister also confirm that this means the underspend for 2012-13 would be 2% higher than the 1.5% figure that his Department says is consistent with “prudent financial management”?
	We think that people will struggle to understand why this money has not been spent on the NHS. That is why we proposed that the Treasury exceptionally allows a £1.2 billion “end-year flexibility” carry-forward of around half of this year’s under-spend. We would ring-fence this money for social care budgets this year and next, to tackle the immediate crisis, with £600 million allocated for 2013-14 and a further £600 million allocated for 2014-15. With that extra investment, we could relieve the pressure on A and E and help to tackle the scandal of care services being withdrawn from older people who need them, enabling more people to stay healthy and independent in their own homes, and help families being squeezed by rising charges for care.
	I thank the right hon. Member for Charnwood and members of the Committee—and other hon. Members on both sides of the House—for the sterling and thorough work that they have done and the powerful arguments they have made, especially on integration. They are right to highlight those issues, because it is the only way in which the NHS and care services will be able to make the necessary step changes to meet the challenges of an ageing society within the financial constraints we face. It is just as important that we get it right in terms of outcomes for patients, because the care services they receive will be greatly strengthened and improved through integration.

Daniel Poulter: It is a pleasure to close this debate and to respond to my right hon. Friend the Member for Charnwood (Mr Dorrell) and to his Committee’s report. I had the great privilege of serving under his chairmanship before I was appointed as a Minister, and he has been perhaps the greatest advocate of joined-up and integrated care, both as a distinguished member of previous Governments as Secretary of State for Health, and in all the work he has done as Chair of the Health Committee. His work has helped to lead to the great emphasis that the Government are placing on integrated and joined-up
	care, both through the Health and Social Care Act 2012 and in the statement by the Chancellor last week.
	Friday marks the 65th anniversary of the NHS. I am proud to work in the NHS and to look after its patients. I think every Member in this House wants to see a health service of which we can all be proud. We are proud of our health service, but this 65th year of the NHS has also been marked by many challenges, which were outlined in the Mid Staffs report, the response to Morecambe Bay and in the comments on Tameside hospital made by the hon. Member for Denton and Reddish (Andrew Gwynne). We have to respond to those challenges, and the Government are taking strong steps to ensure that we deliver and stamp out the small pockets of poor care in the care system.
	If we are to deliver a health service that is fit for the future, it has to be a joined-up health and care service. We can no longer afford to see the NHS and the social care sector as silos in their own right: we have to have a joined-up integrated approach. It is for that reason that we are proud to have increased the NHS budget by £12.7 billion. We are driving integration with that budget increase. We are encouraging local authorities and the NHS to collaborate in treating the needs of patients, and to address the problem highlighted by the Select Committee of people being passed, like pass the parcel, from one part of the system to another without any joined-up thinking or integrated care. I know that Members on both sides of the House want an end to that. In the spirit of consensus, we all want a health and care system that truly looks after the needs of individuals and is not run by the different financial and cultural silos of the whole.
	We have heard strong contributions from hon. Members on both sides of the House in what has been a consensual debate. If we are to tackle the challenge outlined by Sir David Nicholson in 2009, when the previous Government were in power, to make 4% efficiency savings year on year just to stand still and to meet the increasing demand of an ageing population and the increasing health care expectations of patients, then we need consensus. To meet the challenge, we have to see a fundamental service transformation and redesign. We also have to see a far more productive NHS. Productivity gains and efficiency savings have to be made, while the challenges outlined by the Mid Staffs case and others are just as true today.
	My hon. Friend the Member for Witham (Priti Patel) outlined clearly the importance of cutting back on bureaucracy and waste in the NHS where possible. Under the Health and Social Care Act 2012, £1.5 billion of bureaucratic savings will be put back into front-line care on an annual basis. She was right to highlight the importance of clinical leadership in delivering better services. There is good evidence that clinical leadership is not just about improving patient care. We can improve productivity through clinical leadership by improving the procurement of services and goods in the NHS. Procurement of services and goods makes up £20 billion of the NHS budget. There is good evidence that strong clinical engagement and leadership will help us to deliver greater productivity.
	My hon. Friend the Member for Bosworth (David Tredinnick) talked about a number of other opportunities
	that the Health and Social Care Act offers to drive integrated care. I am pleased, as late converts, that the Opposition are now supporting the arguments we outlined during the passage of the Act about the importance of integrated health and social care. He also looked forward to the debate, which I will not enter into today—I hope he will forgive me—about the importance of complementary and alternative therapies. I look forward to furthering that debate with him next week.

Jim Shannon: I thank the Minister for giving way—I asked to make an intervention beforehand, so he knows the subject matter. In the last year health tourism cost the NHS some £24 million, ranging from £100,000 in some trusts to £3.5 million in others. The Secretary of State made an important statement this morning about addressing that issue. Is the Minister in a position to set out the time scale for saving the NHS that £24 million a year?

Daniel Poulter: The hon. Gentleman is absolutely right to highlight the fact that health tourism presents challenges. We need to look at them, which is why we have launched a consultation on exactly how to do so. We should recognise that we hugely value the fact—it is very beneficial to the British economy—that students come here from overseas to train and, sometimes, to work. Part of ensuring that they do so in a responsible manner and do not short-change British taxpayers and British patients means making provision for their health care needs, if necessary, and ensuring that the NHS does not pick up the tab. That is something we have opened a consultation on. It will report back later this year, and I am happy to discuss the matter further with the hon. Gentleman away from this debate.
	In opening the debate, my right hon. Friend the Member for Charnwood was absolutely right to ask how we would deliver greater productivity in the NHS and to say that pay plays a part. Improving procurement, driving greater productivity and, crucially, service reconfiguration all play their parts too. It is worth highlighting the fact that the NHS needs to become more efficient at how it manages its estates, with £3.1 billion or so spent on NHS estates annually. There is much that can be done to improve the energy efficiency of those estates, which is why the Government launched a £50 million fund to support that work. A lot also needs to be done to reduce the £2.4 billion temporary staffing bill. That is something we will be talking about when we launch a paper later in the summer. There also needs to be greater focus on good leadership at board level—something we have touched on before—and engaging clinical leaders in helping to drive productivity and improvements in patient care.
	It is also worth outlining the role of tariffs, which were touched on in the Committee’s report and in today’s debate, in driving more joined-up care. It is true that tariff change in itself is not good enough to drive improvements in patient care. Tariff change must drive service change and transformation at the same time, driving the more integrated care model that we all believe in. When my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) was Secretary of State, he initiated a review of the tariff system and looked specifically at best practice tariffs. We are now seeing the emergence of tariff change in a way that not
	only reduces costs, but drives service transformation. In the case of fragile hip fractures, day case procedures—such as cholecystectomies and similar procedures—and major trauma, we are seeing service change and transformation being driven by improved tariffs, which often cut across primary and secondary care.
	If we are to deliver an NHS that is fit for the future, both financially and in human terms, that will be down to major service transformation and moving towards a system that provides integrated health and care. That is why last week my right hon. Friend the Chancellor outlined in his statement a £3.8 billion fund that will be shared between the NHS and local authorities to deliver integrated services more efficiently for older people and disabled people, ensuring that health and social care work together to improve outcomes for local people. Importantly, the Health Committee’s calls for health and wellbeing boards to play a vital role in overseeing the fund is something that we envisage becoming a reality.
	In conclusion, we know that there are big challenges to the NHS in driving up productivity, and we know that we have already met some of them by cutting out, through our reforms, £1.5 billion of bureaucracy in the NHS—money much better spent on patient care. Crucially, in the years ahead, we will focus on the service transformation that is required to deliver a more integrated health service, continuing to develop those best practice tariffs that drive integration and bring together health and social care. It is not just about finances, because it is also about good care, which is why it is important to deliver the integrated system that patients deserve.

Stephen Dorrell: rose—

Lindsay Hoyle: Did you want to come back, Mr Dorrell? We are up against time with the next debate.

Stephen Dorrell: I am not pressing; I was led to believe that it is the convention to respond. I believe I have two minutes.

Lindsay Hoyle: One minute, I am sure you have.

Stephen Dorrell: I will seek to compress the one point that I wanted to make into one minute.
	I stressed the importance of the role we have sought to play in the Select Committee in developing a cross-party view of the challenges facing the health and care system. That is not the same as saying that they are not political. A cross-party view has been demonstrated by people with different constituency interests and different ideas about how, in precise detail, that shared view about the future of health and care needs to be delivered. The challenge for both the Opposition and Government Front-Bench teams is to do what their predecessors—in my time as a Minister and stretching back before me—did not do, which is to turn the rhetoric about transformational change in health and care into a reality.
	What we have sought to do in the Select Committee is to sketch out the ground and indeed some of the methods by which we believe that can be done. We welcome the fact that the Labour party has picked up our views on health and wellbeing boards, and we welcome the fact that the Chancellor of the Exchequer has picked up our views about a ring fence for social care spending. There is hope for the future that a Select Committee can sketch out common cross-party ground in an area of public policy that is necessarily as political—with a small “p”—as health and social care.
	Question deferred (Standing Order No. 54(4)).

department for transport

Rail 2020

[Relevant Documents: Seventh Report from the Transport Committee, Session 2012-13, Rail 2020, HC 329-I, the Governmentand Office of Rail Regulation responses, Session 2012-13, HC 1059, and the Rail Delivery Group andPassenger Focus responses, HC 81.]
	Motion made, and Question proposed,
	That, for the year ending with 31 March 2014, for expenditure by the Department for Transport:
	(1) further resources, not exceeding £3,070,706,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,
	(2) further resources, not exceeding £4,648,442,000, be authorised for use for capital purposes as so set out, and
	(3) a further sum, not exceeding £6,414,882,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Nicky Morgan.)

Louise Ellman: I am pleased to have this opportunity to debate the Transport Committee’s Rail 2020 report, which we published in January. The report sets out our vision for the railway to the end of the decade. Our main focus was considering the Government’s plan to achieve efficiency savings of £3.5 billion by 2019, and its implications for passengers and taxpayers. Currently, the railway costs the taxpayer around £4 billion each year. These issues are highly relevant to today’s consideration of the departmental estimates.
	It is important to put today’s debate into context. In many ways, the railway has been a success. The number of passenger journeys has almost doubled since privatisation from 735 million in 1994-95 to 1.6 billion in 2011-12; passenger miles travelled have doubled over the same period to 35.4 billion; and rail freight has expanded by over 60%, with 11.5% of freight now conveyed by rail. There has been investment in major projects such as Crossrail and Thameslink in London, with more ongoing or planned work to electrify 800 miles of track and improve rail services in the north with the northern hub.

Caroline Lucas: Can the hon. Lady tell me whether she or her Committee have made any assessment of the “Rebuilding Rail” report, which says that we could reduce fares if we could reduce the fragmentation of the rail system by bringing the rail back into public ownership?

Louise Ellman: Addressing fares is an important matter, which I shall refer to later, although we have not specifically considered the report that the hon. Lady mentions.
	An important aspect of our inquiry examined Government policy on franchising, particularly in relation to securing value for money. During our inquiry, franchising policy was thrown into disarray when the competition for the inter-city west coast franchise was cancelled as a result of major errors made by the Department for Transport. We published a report on that issue earlier in the year.
	A number of serious mistakes were made by officials, but there were also policy failings for which past Ministers were ultimately responsible. The review of franchising
	that Richard Brown undertook at the request of the Department concluded that it was not sensible to let a 15-year contract for the west coast franchise without a break clause. He also drew attention to the difficulties caused by cutting back on resources while attempting to meet an ambitious timetable. The Department has now published a new timetable. The postponement in tendering for new franchises means a delay of 26 years, with consequential uncertainty for the industry and potential financial implications. I will return to that issue later.
	Rail poses a number of policy challenges. Increasing numbers of passengers have led to overcrowding on some routes, and capacity constraints can rarely be resolved quickly or cheaply. It is also important to remember that rail investment is vital for regeneration as well as for relieving overcrowding. The provision of rolling stock is complicated and expensive. Fares are often too high and difficult to understand, and a wide variety of fares are often available for the same journey, from heavily discounted “advance purchase” tickets to very expensive “anytime” walk-on fares. The structure of the industry is complex, and there is suspicion that it creates opportunities for money to leak out of the system, some of it in the form of unjustified profits.
	The rail subsidy peaked at £7 billion in 2007-08, and the previous Government asked Sir Roy McNulty to consider how to secure value for money. His report was published in 2011. His most striking conclusion was that there is a 40% efficiency gap between the UK railway and four European comparators: France, the Netherlands, Sweden and Switzerland. Reasons given for that disparity include the fragmentation of the rail industry, poor management, problems with franchising, and cultural factors. He made a wide range of recommendations aimed at achieving a 30% cost reduction in the industry by 2019.
	Although the rail subsidy has fallen in recent years, it is higher now than in the years before privatisation. In real terms, the passenger railway costs 50% more than in the early 1990s, and there are a number of reasons for that. Increased demand has led to new capital projects and rolling stock.

Kelvin Hopkins: My hon. Friend may be interested to remember a report by Catalyst which found that productivity under British Rail was, at that time, the highest in Europe. Since then, things have changed dramatically.

Louise Ellman: My hon. Friend makes a relevant comment.
	As Network Rail’s debt has grown, more money is being spent on servicing that debt than ever before, and train operating costs have increased. Rail subsidy is necessary. Few rail lines would be profitable on a commercial basis, and even potentially profitable lines would lose passengers if the national network was cut back. There are good environmental and social reasons to subsidise the railway, and we were pleased to hear that the Government share that view.
	Although, the Government want to cut the subsidy, it is not clear what level of reduction they seek and under what time scale. Neither is it clear exactly where the subsidy goes at present. The Department should articulate more clearly why it subsidises rail and what taxpayers get for their money. We recommended that the Government consult on and publish a clear statement of what the
	rail subsidy is for and where it should be targeted. The Department’s reply was disappointing and focused on practical difficulties because of current funding arrangements. There is scope for much more work in that area.
	This issue illustrates the lack of transparency in the rail industry. That has now started to change with recent work by the Office of Rail Regulation and the disclosure of wide variations in the financial performance of different routes and operators. Establishing why those variations occur will be crucial to ensuring that the rail subsidy is well spent.
	Securing the efficiency savings indentified by McNulty will be challenging, particularly as they require different parts of the industry to work together in new ways. More than £1 billion is expected to be saved from train operating costs. I am concerned, however, that the savings have been put at risk by the Department’s problems with franchising. In many cases, existing franchisees will be awarded new contracts to run services for as long as four years. The Department will struggle to drive a hard bargain with existing operators without going to the market. I ask the Minister whether the Department’s decision to prioritise the re-tendering by 2015 of the east coast main line, currently operated by the Department’s company, Directly Operated Railways, will weaken the Department’s bargaining power as it seeks to extend franchises. It is clear that the Department does not want trains to be run by the public sector.

Graham Stringer: My hon. Friend is making a powerful point. Does she agree that the Government are trying to privatise the east coast main line for completely ideological reasons, and not for reasons of financial benefit? The east coast main line gives £563.4 million back to the Exchequer, which is almost twice as much as Virgin gave back over a two-year period. It also gets only one seventh of the subsidy per passenger mile, so there can be no other reason than ideology. The plan is undermining the Government’s negotiating position as they extend the other franchises by nearly 26 years.

Louise Ellman: I thank my hon. Friend for his comment. The Minister was questioned in the Select Committee and it became apparent that the Government’s decision was to do with Government policy. I, for one, did not hear a compelling value-for-money reason for the decision.
	There are a number of ways of assessing whether a franchise delivers value for money. The letter that the Minister sent to the Committee on 4 June stated that, over the three years 2009-10 to 2011-12, the inter-city east coast franchise produced a net return to the Department of £563 million. The letter also stated that, over the same period, the west coast main line made a net return of £290 million. The Minister certainly did not accept that that meant that the east coast franchise produced better value for money, but I am simply presenting the facts in the letter as a contribution to the debate. One consequence of the decision has been the postponing of the re-letting of the west coast franchise by 29 months, to April 2017. The previous timetable had been announced as recently as November. It is a matter of concern that such constant change is unsettling for the industry.
	We have already seen two direct awards to current operators, and neither has demonstrated how the Government can secure a better deal for passengers or taxpayers. In the case of the west coast franchise, we were told that there might be new services to Blackpool and Shrewsbury, but they have not materialised. The old Essex Thameside franchise paid money into the Department. The new one, a directly awarded contract to run until September 2014, will cost the taxpayer money. Will the Minister acknowledge that there will be problems in achieving the McNulty savings in light of the franchising fiasco and its aftermath?
	The Committee recommended that the Department should strengthen its commercial capability in relation to assessing franchises, that it should consider franchises being let and managed by a Department agency or arm’s length body, and that it should consider spreading premium payments over the full length of the franchise. We suggested that franchise periods of seven to 10 years would be appropriate while the situation was being reviewed. Indeed, a review is now taking place, and we hope to hear the Government’s conclusions shortly.
	During our inquiry, the rail unions argued that the privatised structure was the main cause of inefficiency in the industry, and that renationalisation would bring costs down. McNulty rejected that argument, saying that renationalisation would
	“take years to complete, cause major diversion of effort, incur massive costs, and delay progress on improvements”
	that were under way.

Kelvin Hopkins: It has been said many times that all that is needed to solve the problem is for the franchises to be awarded to Network Rail.

Louise Ellman: Having considered all the evidence before it, the Committee decided that McNulty’s proposed methods of achieving efficiencies should be given a chance, although some concerns were expressed. We felt that if the McNulty savings did not materialise, the arguments for more far-reaching structural changes would be compelling.
	We have identified a number of issues that the Government must get right if the railway is to continue to grow and become more efficient. The McNulty recommendations include calls for ticket office hours to be reduced, for driver-only operating to be the norm, and for salary restraint. The Committee considers that any changes in staffing, terms and conditions and salaries should be made in the context of a wider programme of changes made throughout the industry and after full consultation with trades unions. Any changes in the numbers and duties of station staff should not be pursued solely to reduce costs, but should reflect changes in passenger ticket-buying behaviour, and should be designed to improve passengers’ experience at stations, including their perception of safety. We were very concerned about the possibility that reducing staffing at stations and on trains would make the railway less safe, particularly at night, and would deter women and vulnerable users from travelling by train.

Caroline Lucas: Given that the train operating companies depend on public subsidies, does the hon. Lady agree that it is entirely wrong for those same companies to hand over an estimated 90% of their operating profits to shareholders, rather than reinvesting them in the staff and safety provisions to which she has referred?

Louise Ellman: That is a very interesting point. The thrust of our inquiry concerned how efficiencies could be achieved without jeopardising passenger safety. As I have said, the Committee felt that the McNulty changes should have a chance to succeed, but that if they did not, other measures should be considered. We intend to return to the issue of safety in the inquiry on policing the railway that we recently announced.
	We have no objection in principle to the development of joint working between Network Rail and train operators through, for example, the Rail Development Group and rail industry alliances, but new arrangements must not compromise safety. We will consider that in more detail in our proposed new inquiry on safety at level crossings. The interests of the travelling public must be protected throughout the partnerships, and so must the interests of freight, which, by its very nature, cannot be involved in a partnership in the same way as passenger rail.
	I have discussed financial aspects of franchising, but other aspects are also important. One question that remains unresolved is how the Government will fulfil their promise to put passengers’ interests at the heart of franchising. We have raised that in the Committee, but we have not yet heard a full explanation of how it is to be achieved.
	The outcome of the Government’s long-awaited fares and ticketing review is also crucial. We were pleased to learn that the Department had ruled out the introduction of “super-peak” fares to reduce demand for the busiest peak-time services, but it remains committed to managing demand to reduce overcrowding. It is not clear how that will be achieved. We also welcomed the Government’s decision not to proceed with RPI+3% fare increases, but recognised that that left them without a clear policy on fares. Smart ticketing is another issue mentioned in our report on which progress has been slow. Can the Minister tell us when he will publish the report of the outcome of the Department’s review, which is already overdue?
	The Committee’s vision for rail included the following: a clear link between policy on rail and other aspects of transport policy; a strategic approach to policy making by the Department that does not sacrifice democratic accountability, assisted by a strong industry regulator and an effective industry leadership; clarity about the objectives of subsidising rail and how these can be achieved; more transparency about the costs of rail; passenger interests to be more clearly taken into account in deciding questions of rail policy; more modern, flexible fare and ticketing options and a clear long-term policy on regulated fares; and no diminution in existing safety standards.
	The Government have struggled so far to set out their own vision for rail or to link rail policy to other transport priorities. The west coast main line franchising fiasco has knocked the Department off course and threatens to challenge efforts to achieve better value for money across the industry. Strong leadership is required.
	Rail is increasingly popular. It is important that the Government’s investment in rail, as part of our transport network, secures value for money for both taxpayer and passenger.

Iain Stewart: It is a pleasure to follow, for the second successive Wednesday, the hon. Member for Liverpool, Riverside (Mrs Ellman), Chairman of the Transport Committee. Last week our discussions were about high-speed rail; this week’s discussions will be at a slightly more sedate pace.
	These are encouraging times for railways in the United Kingdom. As the hon. Lady mentioned, since privatisation passenger numbers have doubled and freight is showing a healthy increase of about 60%. That compares very favourably with our counterparts on the continent. I believe it is fair to say we have had the fastest growth in rail usage.
	We are also seeing a substantial programme of investment in our rail network, with large projects such as the electrification of the great western line and the midland main line and the opening of new rail lines, including, I am pleased to say, the east-west line through my constituency to connect Bedford, Milton Keynes, Oxford and Aylesbury, and, it is to be hoped, in due course going further east towards Cambridge and the East Anglian network.

Caroline Lucas: The hon. Gentleman made some comparisons with the rest of Europe in terms of railway passenger numbers. Would he also make some comparisons about the levels of fares in this country and many other European countries?

Iain Stewart: I will happily do that. Indeed, I looked into this matter for a previous debate, as it is often claimed that our rail fares are the highest in Europe. Certainly if we compare immediate, walk-up, any time fares, we are comparatively more expensive, but if we look at the whole basket of fares, we compare very favourably. I urge the hon. Lady to look at an independent website compiled by regular rail users called “The Man in Seat Sixty-One”. It compares similar journeys on the continent and here, and for even very short-time advance fares we compare very favourably, so I do not accept that across the piece it is more expensive to travel by rail in this country than on the continent.

Cheryl Gillan: As my hon. Friend has been comparing fares between here and the continent, does he agree that we have greater scope to use different levels of fares to spread the use of our railways more evenly throughout the day, rather than having people crowding into certain rush hour periods? That would be a useful change that could be made, especially on certain lines.

Iain Stewart: I am grateful to my right hon. Friend for that. I think I anticipate where her question is leading—it perhaps relates to high-speed rail—and I hope she will forgive me for not commenting on that. However, I agree that there is potential for expanding rail use outwith the peaks. Although the whole west coast main line franchise process had to be suspended, FirstGroup’s bid submission contained an ambitious but, I thought, deliverable wish to increase patronage of the railways outwith the peaks. That will help to generate more income and bring about a shift from other modes of transport to rail.
	On investment, I was mentioning some of the larger projects that are going on, but much smaller-scale, incremental improvements are being made, particularly on the west coast main line. Passengers in my constituency are already benefiting from the lengthening of the Pendolino trains from nine to 11 carriages; and on London Midland’s commuter lines the speed of many trains has already been increased to 110 mph and it is in the process of procuring additional carriages to provide more capacity on those trains. so substantial investment is being made at the moment.
	That investment compares very favourably to the situation not that long ago—two or three decades ago—when our railways were in a period of marked decline. The Serpell report in the 1980s was commissioned by the nationalised British Rail, and its most radical option would have truncated the national network. There would have been nothing north of Newcastle, nothing west of Exeter and the network would have been reduced to the core inter-city lines in a bid to cut out loss-making lines and deliver the railways to profitability.

Damian Collins: My hon. Friend will welcome, as I do, the transformation of rail services in Kent thanks to High Speed 1 and, in particular, the additional investment in extra trains and services resulting from the popularity of that new route.

Iain Stewart: I am happy to endorse the point that my hon. Friend eloquently makes. I have travelled on that line and seen at first hand many of the improvements that have been made.
	The point has been made that the rail network requires subsidy to operate, and I agree with that. Many lines would not be profitable in themselves, but for social and environmental reasons they require subsidy. We need to take into account not just the operating profit and loss of an individual rail service, but the opportunity cost: the cost to the country if that rail line did not exist and people had to travel by car or another mode of transport. We can only imagine the congestion on the roads around our major cities if we did not have commuter rail lines. They might not, in themselves, be profitable, but the environmental and financial cost of having those passengers travelling by car or another mode of transport would just be too much to bear.
	I welcome the Government’s commitment to continue to subsidise large parts of our rail network, but we cannot escape the conclusion that Sir Roy McNulty and others reached in their report, which was that we should be looking to make our network as efficient as possible, in order to achieve his aim of a 30% reduction in the unit cost. Our network is comparatively expensive to run compared with others. I believe that that is a product of history, not just of one approach, be it the franchise model or the nationalised model. It is a cost that has been built into the system over many decades, particularly because until relatively recently we have had a period of managed decline of our network and what investment there has been has been made on a “make do and mend” basis. Additional costs are hard-wired into our system, but the system we now have is sensibly evolving.

Graham Stringer: The hon. Gentleman is a serious student of the rail system in this country. There is not a lot in what he has said with which I disagree. He is
	trying to put the issue into its historical perspective, so let me put it into real historical perspective. When John Major’s Conservative Government privatised the railways in the 1990s, they came to this Chamber and told right hon. and hon. Members that there would be no subsidy. That was used as justification for selling the railways off at a lower price. Network Rail now carries a debt of £30 billion on its balance sheet, so I hope the hon. Gentleman will take into consideration the false prospectus that the Conservatives gave this House in the 1990s.

Iain Stewart: It is always a pleasure to take an intervention from my fellow Select Committee member. If the hon. Gentleman will forgive me, I will not rehash the debates of the 1990s as I am more interested in what happens from here on. In an earlier intervention, he made the point that the Government are seeking to return the east coast main line to private hands as a matter of ideology. Equally, I could argue that it is because of ideology that the Opposition want to renationalise it. I draw the hon. Gentleman’s attention to the conclusion of Richard Brown’s report on franchising, which concluded that the franchising model was not fundamentally flawed and that although the detail could sensibly be changed, the investment in and success of the railways could not have happened if the franchising was fundamentally flawed.
	Let me turn to a number of initiatives that, I believe, can deliver a more efficient railway. The hon. Member for Liverpool, Riverside mentioned the development of alliances between Network Rail and train operating companies. That is a very helpful and sensible development. The one large-scale alliance, between Network Rail and South West Trains, has not been in operation long enough for us to make any sensible assessment of what savings it can deliver, but as the real expert, Nigel Harris, said in evidence to the Select Committee, it
	“is the only game in town”
	at the moment and requires a fair wind to achieve the savings that it hopes to.
	Such alliances are not the only form of alliance available. One or two other examples provide evidence that such an arrangement can deliver useful savings and efficiencies in the railway. The project in Scotland to electrify the branch line to Paisley Canal on the Greater Glasgow network was an alliance between Network Rail, First ScotRail and Babcock engineering. They were able to electrify the branch line at a substantially lower than expected cost and two years ahead of the planned development because the power was devolved down to that level, meaning that the various experts and operators could get together and deliver the project very efficiently.
	I am doing a fellowship with the Industry and Parliament Trust on the rail industry and I have spent a good number of days going around parts of the railway system. I have seen two separate examples of an alliance between a train operating company and the rolling stock manufacturer, which enables a much more efficient system of maintenance and refurbishment of the rolling stock. I visited the Kings Heath depot, jointly operated by London Midland and Siemens on the London Midland franchise, and—this will interest my hon. Friend the Member for Folkestone and Hythe (Damian Collins)—the Hitachi depot where the Javelin trains are maintained with Southeastern. Those depots are delivering a much
	faster and more efficient turnaround in train maintenance. They are not “grands projets” or exciting stuff, but they deliver a much better service for rail users at a much lower cost.

Damian Collins: My hon. Friend mentions the Southeastern trains. He might have noticed that the Javelin trains perform much better in poor weather, as they can cut through the snow and, effectively, open up the lines for the more traditional services.

Iain Stewart: That is another excellent point from my hon. Friend. As we continue to procure new rolling stock, there is greater scope for the more efficient method of alliancing between operators and manufacturers.

Marcus Jones: Does my hon. Friend agree that alliances between Network Rail and local authorities are also extremely important in delivering local rail infrastructure projects, such as the Coventry to Nuneaton rail upgrade? We are working with Network Rail and local authorities, with funding from the Government, to deliver that important project.

Iain Stewart: I am happy to endorse that point. There is no one-size-fits-all model of alliance; different parts of the country will have different network requirements, and it is sensible to allow different arrangements to be established where they make sense.
	Before leaving alliances, I want to sound two cautionary notes about bigger alliances, such as the one between Network Rail and South West Trains. First, they should not exclude open access operators, which I think offer a healthy alternative and competitive service on some lines. There is concern that too tight a deal between Network Rail and the dominant train operating company might—I put it no higher than that—exclude open access operators. I ask the Minister to keep an eye on that. Related to that, one of the witnesses to the inquiry that the Transport Committee is conducting into access to ports flagged up a concern that rail freight operators might be disadvantaged in securing paths on busy rail lines if too deep an alliance exists. Again, that is only one concern that has been expressed, but it is something to keep an eye on.
	I agree that the Government’s review of ticketing offers considerable scope for encouraging more passengers on to the railway system and delivering that aspect of the network more efficiently and cheaply. There are all sorts of options, including smart ticketing and moving staff from behind windows on to station concourses to assist passengers; and more and more people will use their mobile phone to buy tickets and make reservations. The Select Committee heard evidence from some train operating companies that they will be able to deliver a more customer-friendly system of making reservations, rather than customers having to reserve some time in advance. There are considerable opportunities to boost numbers on our railways.
	Another opportunity is offered by developing retail services at stations, from large destination stations such as St Pancras, where there is a considerable number of retail outlets, down to much smaller stations. As part of my IPT fellowship, I looked at Denmark Hill station.

Kelvin Hopkins: Perhaps the rents from premises on stations will go to the railway industry, but profits will go to the retailers, so retail development at stations would not make much difference, I would have thought.

Iain Stewart: I must disagree. Airports derive a considerable part of their income from the retail space at airports, and I see no reason why railway stations could not do the same. I am not saying that it would transform the economic model of railways, but it would be a useful additional source of income.
	As I was saying, retail development is happening at smaller stations. Denmark Hill station is a lovely Victorian building, which is being remodelled so that, instead of a fairly horrible little ticket office and coffee machine, there will be a swish café, making it a much more attractive environment that will encourage people to use the railway. There is a lot of scope in such developments. I would even suggest that, where the Government are trying to reduce Government real estate costs, they might consider moving services like post office counters into railway stations. It would be a bit of joined-up government to have public services all available in one spot. That is just one little suggestion, but at the heart of all this is the ability of the private sector to innovate, provide different services and deliver what the customer wants.

Kelvin Hopkins: It occurs to me that if all the retail outlets and hotels were, perhaps not renationalised, but taken back into, say, Network Rail, all the income and profits would go to the railway sector, rather than retail.

Iain Stewart: The hon. Gentleman seems to have a rose-tinted view of British Rail. I gently remind him of the nationalised British Rail catering options, from the curling cheese sandwiches to the tea and coffee that were indistinguishable. I would support private innovation in that field.

Kevan Jones: I am sorry that the hon. Gentleman has such strange views of the old British Rail, which I accept was starved of investment under successive Governments, but certainly the breakfast on the east coast main line was excellent.

Iain Stewart: I am too young to have been able to enjoy the east coast main line in those years, so I cannot comment, but from what I remember of the old British Rail Scottish region, the catering offer was not—

Sheila Gilmore: rose—

Iain Stewart: Edinburgh is about to intervene.

Sheila Gilmore: Has the hon. Gentleman sampled the catering offer and customer comfort on ScotRail, because I rather suspect it is not much better?

Iain Stewart: I have been on a number of trains in Scotland and had a thoroughly enjoyable experience. I do not know which services the hon. Lady has been on, but the last time I took a ScotRail train it was rather good.
	If the Minister will forgive me, I want to touch on two local issues. First, I mentioned earlier the welcome investment that Virgin and London Midland are making in their rolling stock, which when all is delivered will achieve a considerable increase in capacity for my
	constituents. Until we get that, we have a problem with overcrowding, particularly during the evening peak. I have written to him about that before and so am just giving a gentle nudge to see whether we can reach a temporary arrangement between London Midland and Virgin to allow some London Midland passengers to use Virgin trains in the evening peak in order to spread demand.
	Secondly—I made this point this last week—when we look at the second phase of high-speed rail and where the east-west line will intersect the proposed high-speed line in Buckinghamshire, perhaps it would be sensible to look at an intermediate station to allow people in Milton Keynes and the rest of Buckinghamshire to access the line.
	In conclusion, the railways are in a good place. The problems and challenges we face are the product of success and increased patronage. The investment that is being made is welcome. I heartily endorse the different investments the Government are making and look forward to our achieving another golden age for the railway network.

Alison Seabeck: My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), in her usual expansive and thoughtful way, gave a very detailed assessment of her Committee’s work, particularly in relation to rail franchises. Its excellent and extremely thorough report on public support for the railways and the implications of Government spending plans, as well as the subsequent report on the collapse of the west coast main line franchise, paints a worrying picture of an overcrowded, overpriced and, at times, dysfunctional railway system that needs continued public support.
	The Committee also expressed a view on the delicate balance that needs to be struck, but which is not always achieved, between the Government seeking savings and seeking, at times, to micromanage while at the same time not always listening to rail users and lacking accountability, specifically in relation to the franchise process.
	From a south-west perspective, we have the Great Western main line carrying 50% more passengers than it did 10 years ago. Network Rail states that the line is full. In 2002-03, 72 million people used the line, and in 2012-13 the figure was 110 million. The Reading to Paddington trains account for six out of 10 of the most overcrowded journeys in the UK. There is simply no more space for extra trains at peak times to relieve those pressures at the moment.
	As the Select Committee acknowledged, the competing pressures mean that freight lines—so important, although that is perhaps not always fully recognised by the House—commuter lines and community lines, as well as intercity services, are almost at breaking point in some areas. On the main line between Penzance and London there is at times single-track running, in part because of the topography. Lines run along the seafront at Dawlish, and locals have concerns about that as the sea level rises.
	To the great anger of people living in the far south-west, there is a sense that none of the problems is likely to be resolved because investment in rail has been made elsewhere in the country under successive Governments. We know
	from answers to parliamentary questions that transport and rail spend per person in the south-west is lower than virtually anywhere else in the country.

Kelvin Hopkins: I am sorry to disturb my hon. Friend’s flow. She was talking about the competing demands for freight and passenger capacity. Does she not agree that if freight could be dealt with by alternative infrastructure investment, freeing up the main lines for passengers yet again, that would make a real difference?

Alison Seabeck: That argument can certainly be made by people in the south-west, in respect of whether there is scope for realigning the routes for the main line and allowing freight to use some of the older lines. However, the issue is complicated and hugely expensive, as I am sure the Minister would be the first to tell me. There are a lot of people, certainly in the south-west, with a lot of good and interesting ideas. Were the money available, I am sure that Governments of all complexions would be prepared to consider them.
	The investment started under the last Labour Government at Reading and in Crossrail will improve reliability and connectivity. However, the geographical constraints on the tracks’ infrastructure in the south-west will continue severely to limit the maximum line speed and extend journey times. If we are serious about reducing pollution and car use, it should not be quicker to drive from Tiverton or Exeter to Plymouth than to take the train.
	The fragility of the south-west’s infrastructure has been ignored repeatedly. The recent severe floods affecting the signalling near Taunton, washing away the line at Cowley bridge, has served only to reinforce the view in the south-west that people in Whitehall do not have a clue about the potential for economic growth in the region.

Mel Stride: I agree that railway resilience is a particular issue in the south-west and Cowley bridge has been a particular problem. However, does the hon. Lady welcome, as I do, the fact that many millions of pounds are now being invested in the Cowley bridge problem, in particular to make sure that cabling is above the likely water level in the event of further flooding? Does she welcome and recognise that progress?

Alison Seabeck: That work was essential. We cannot continue with a situation in which severe weather conditions completely wipe out the links to the far south-west. No Government of any complexion would ever have been forgiven for not ensuring that the signalling around Cowley bridge in particular was made more resilient.
	I was about to mention some of the important pinch points highlighted by Network Rail in the region, including Cowley bridge. Others were Chipping Sodbury, Hinksey, Whiteball tunnel, Athelney, Hele and Bradninch, Flax Bourton, Patchway tunnel and the Exeter diversionary route, all of which eventually need to be progressed. I fully accept that there is a restricted funding envelope, but how that limited funding is prioritised across the country can give or take away hope from rail users and local authorities, particularly in the south-west.
	The latest solution for the problem at Exeter, over and above the lifting of the cabling and signalling, and put forward by the Environment Agency, appears to
	have been effectively to put a barrier across the section of rail if the flooding comes back, to manage the water flow. That effectively closes the south-west off for business. Plymouth has no airport and if either the M5 or the A303, which is not yet dualled, close at the same time, as has happened more than once, financial losses in the region will be significant, running into millions of pounds.
	The weather troubles of last winter showed precisely the need for improvements to infrastructure in the south-west. During that period, First Great Western’s public performance measure for trains arriving on time fell to 80%. We should acknowledge—I am sure that Government Members who use the service would do so—the work that the staff of First Great Western undertook at that time, which was well over and above their usual call of duty. That includes everybody from drivers to station managers to the man who was tweeting the problems on the line—as well as the engineers, of course, who were out in all weathers trying to mitigate and cope with the effects of landslides and flooding.

Simon Burns: And the emergency services.

Alison Seabeck: And, of course, the emergency services. I thank the Minister; he is absolutely right.
	The rail network is our lifeline. Ministers and officials, as well as those involved through other organisations such as the Environment Agency, who clearly have a responsibility for tackling adverse weather conditions, must understand that the transport network and the environmental infrastructure network have to work together and we have to come up with solutions that work for both. We cannot have parts of the country simply being cut off.
	The growth in demand for travel to the south-west for its cities and leisure activities continues to grow, and that is a really good thing. Of course, many of these travellers and visitors are expected to arrive by rail. Indeed, 24,000 people arrived at Castle Cary to go to the Glastonbury festival last weekend, including a member of my staff, who has probably just about recovered. Many businesses are keen to establish themselves in the south-west because of the quality of life there, but they voice concerns about the transport linkages.
	Yet now we have had a backtracking on promises made to MPs, commuters, local authorities and rail user groups regarding the great western franchise. The visit made by the Secretary of State, with a fanfare of trumpets, was welcome. However, on almost the same day, others were being told—officials were talking to officials in local government—that the service upgrades that we had all fought for and believed we were getting were being taken away: no early-morning train to Plymouth, no extra three-hour journeys from London, no wi-fi. Improvements could happen only if a third party—a local authority or business—was willing to contribute. It was always very unlikely that First Great Western would be willing or able to take on the additional financial risk over the shortened period of the revised franchise. There was perhaps a hope that the local enterprise partnerships could step in to assist with the recommended Heseltine regional funding, but the Chancellor knocked that on the head when he reduced so drastically the amount going to the regions.
	If the Government are serious about getting growth back into the economy, they must look at the transport infrastructure in all the regions and not be totally fixated with High Speed 2. How can local authorities invest when they have just learned that their budgets are going to be cut further by the Government, with another 10% having to be found? Many are asking how they can be expected to fund and support long-distance services.
	The franchising and re-franchising process has, at times, been disastrous. The Transport Committee has rightly raised serious concerns and made recommendations, one of which advised the Government to look at wider policy objectives such as the promotion of sustainable end-to-end journeys, the quality of the passenger experience, and, crucially for Plymouth and the south-west, social and economic development. It is far from clear that any of these factors have been considered with any seriousness specifically in relation to the great western franchise. Where is the joined-up government in all this? The delay and uncertainty around the great western franchise is deeply damaging to the region. Other areas are now suffering because of the failure of the franchise process. Staff on the affected lines are concerned that the pressure on the companies is leading to cost-cutting and an increase in casualisation of posts, and from the companies’ perspective there is a risk to share prices and, ultimately, viability.
	There are justifiable reasons—environmental, economic and social—for public subsidy of the rail network, but it is not clear that the Government are getting value for money. There should be greater transparency on where the subsidy is going. It would also be good if we could have some explanation of why the home countries of the overseas-based companies running lines in the UK—they are usually in Europe and include France, Germany, Holland—have fares that are, on average, a third lower than they are here. Are we subsidising some of those routes in Europe?
	My party rightly wants to give the travelling public some hope by using funds more wisely, scrapping the costly privatisation of InterCity East Coast and reforming the ticketing process. Introducing a legal right to the cheapest ticket will help, because people are struggling to use public transport as the cost of living rises and their wages fall.
	Our rail links nationally are a vital part of our infrastructure and are essential to the growth and prosperity of our regions because of their ability to move people and freight. In many parts of the country, however, they are hampered by the failure of the franchise process, the failure of the infrastructure and resilience planning and the failure of this Government.

Ben Gummer: When Thomas Telford was invited at the end of his career to help with the engineering of some new railway projects, the inventor of this country’s modern road network declined the offer, not because he did not admire railway engineering and the extraordinary speeds that these amazing new machines could achieve—he admired them very much—but because he understood that the railway itself had a necessary monopoly that the road did not. Part of the attraction of the road to Thomas Telford was that once it was built, it allowed someone to travel at any time they pleased in their chosen method of transport, but the railway, for all its brilliance, did not.
	That is not to say that the railway is not a useful or brilliant invention. It has been central to the progress and advancement of our country and all developed countries across the world. However, the railway has an intrinsic problem—this is recognised by Sir Roy McNulty’s report, the various commissions instigated by the Department for Transport and, indeed, the Transport Committee report—namely its inability to get the market to work in the normal, functioning way that it would elsewhere.
	The interesting thing about the railway is that, over time, it has found different competitors. Despite the fact that its technology is intrinsically the same as that it began with 200 years ago, it continues to compete with road—over the past 50 or 60 years it has competed with it on speed—and increasingly with flight. Rail, as well as its regulation and franchising arrangements, must therefore be seen in its wider context as a competitor with other modes of transport around the country.
	It is important to understand why the Government are progressing with the reprivatisation and refranchising of various lines. Ideology is important and has been brought up by several Opposition Members, but it is not a matter of ideology that privatisation has worked; it is because it is the most practical and pragmatic way of getting the railways to work. In fact, the entire railway system, which was instigated by the Victorians and which spread around the world to America, France and elsewhere, was a product of private enterprise.

Caroline Lucas: Will the hon. Gentleman give way?

Ben Gummer: I will in a moment.
	The system would not be here were it not for the massive investments—many of which failed as a result of the risk of capitalism—that made this extraordinary invention possible. Before I allow the hon. Lady to intervene, I recall that in a previous debate she told me about the efficiency of the German railway system, but when I reminded her afterwards that it is now a private system she could not believe it. One of the reasons why this country is having to rebuild the railway network is the decades of underinvestment. That is not necessarily a product of various Governments; it is the natural result of a nationalised system whose control rests in the Treasury’s hands.

Caroline Lucas: On that very point, there is still significant state involvement in German railways. What does the hon. Gentleman have to say about the fact that 60% of Britain’s rail operators are owned by European state rail arms? Our high rail fares are being used to subsidise rail services in Germany and beyond, which seems crazy to me.

Ben Gummer: The hon. Lady did not admit to the role of the private sector when I spoke to her about German railways. Of course, there is a role for the state—that is what we are discussing. Any railway has a necessary monopoly: only one train can travel at a time and it has to be owned by somebody. Unlike road, it is not possible for two trains to travel on the same track at the sane time, so the state has to intervene at some point in order to regulate and subsidise, as it does with road travel.
	We have seen the results of privatisation since 1995. Rail travel has increased by 133%. It is at a higher rate than in the 1920s in absolute numbers. Rail freight has also increased to a point that would have been impossible to imagine in the 1960s and 1970s.

Kelvin Hopkins: The hon. Gentleman is raising, yet again, a correlation, not a cause and effect. Railway usage has gone up despite privatisation, not because of it.

Ben Gummer: The hon. Gentleman is a marvel of this House and is respected deeply by many Members on both sides of the House. However, he must see that the graphs of declining rail use up to 1995, for both freight and passenger, were turned on their heads after privatisation. That is not just a correlative effect, but a causal one.

Kevan Jones: I am interested in the hon. Gentleman’s history lesson. He is right that the early railways were pioneered by private enterprise. However, by the time they were nationalised, many of them were in a dire state. That was the case not just in this country, but around the world. Rail passenger numbers went down after the war because there was a rise in car ownership and because of the development of road transport. The reason why Germany has good railways is that a British civil servant planned the system after the second world war.

Ben Gummer: This is an interesting parlour game and we should pursue it at greater length outside the Chamber. The hon. Gentleman is right that the railways were on their knees after the war. That was partly a result of the war and partly a result of the rise of the car.
	It is interesting that this necessary monopoly that was challenged profoundly in the second half of the 20th century is now able to compete successfully with motor vehicles and planes, precisely because of the investment from the private sector. As a result of that investment, the subsidy per passenger kilometre has gone down considerably since privatisation, even though the total subsidy has gone up.

Marcus Jones: My hon. Friend is making an important argument. It has been argued that the decline of the railways was caused by the success of the car. However, car ownership in this country has accelerated since 1995. The increase in passenger numbers therefore shows that privatisation has had a huge positive effect on the railways.

Ben Gummer: I agree completely with my hon. Friend. I will come on in a second to the link between his constituency and mine.

Kevan Jones: Will the hon. Gentleman give way?

Ben Gummer: I will give way in a while, if I may.
	The Government are continuing a strategy. There are, rightly, arguments about whether the franchising process was got exactly right, but to my mind, John Major’s privatisation of the railways was one of his most significant acts. It has transformed the way in which—[Interruption.] Opposition Members laugh, but they ignore the fact
	that we now have some of the safest railways in Europe, second only to Luxembourg, which we did not have before privatisation.

Alison Seabeck: indicated dissent.

Ben Gummer: The hon. Lady shakes her head, but she should listen to the facts. We have the fastest rate of passenger growth in Europe. We have the safest railways in Europe after Luxembourg. That is the result of privatisation, which has made a significant difference.
	The ideologues are the Opposition Members, including the shadow Secretary of State for Transport, who espouse the ideology that dare not speak its name. She wants gradually to bring the railways back into public ownership and undo the extraordinary progress that has been made.

Kevan Jones: The hon. Gentleman has a very selective view of history. He obviously does not remember—perhaps he was still at school—the period between privatisation and the effective renationalisation of Network Rail, when there were a number of tragic rail accidents in this country because of the inefficient way in which privatisation was carried out and the lack of investment. He must take into account that the effective renationalisation of Network Rail was how the investment was got right.

Ben Gummer: I am giving a bit of history because it does inform our discussion of the franchise process, which is the core of the report. I am not going to start trading statistics, but over the period of Railtrack, rail safety improved and we were going up the European safety league table. The reason so much money had to be invested—very successfully with private help—was the years of underinvestment by a series of Governments, Conservative among them. I disagree with the hon. Gentleman’s intervention on that point, not least because the facts on the safety of the rail network under privatisation speak for themselves.
	How do we get this franchise system to work so that rail companies can compete with their natural competitors, the motorways and the airlines? I plead with the Government to do as much as they can. I know that the advice they have had recently has been to shorten slightly the long franchises that have been planned, but the longer the franchise rail companies can get, the better their ability to invest in rolling stock, customer service and improving the capacity and punctuality of their services.
	Those of my constituents who have had the misfortune of having to commute on the Ipswich to London line for a long time will say that the best improvements they have seen were under the first franchise—as I am sure my right hon. Friend the Minister will agree—which was quite long and had the loosest possible terms. It allowed the then Anglia franchisee to put maximum efforts into improving performance. The last Government did many good things in rail, but one of the bad things was to have far too tight a control over the franchises, stipulating to the dot and comma how the services should be delivered. Unsurprisingly, the bidders for those franchises went in at the lowest possible price, bidding on the specification provided by the Government,
	and the improvement in service flattened and, in some cases, reversed. We need as loose a franchise framework as possible, and as long as possible so that the private sector can invest as fully as possible in the services without being second-guessed by the doubtless otherwise brilliant officials at the Department for Transport.
	We need to see other improvements, and I am glad that the Committee recommended them in its report. We need transparency in subsidy. The system is still not good enough at identifying where subsidy goes. I have tried to understand how much subsidy goes in to the great eastern main line. Network Rail and the Office for Rail Regulation are not good at disaggregating subsidy in granular enough detail. I have questioned them about control period 5, but it is almost impossible to get a decent idea of the quantity of subsidy or public investment we are likely to get in our line, which makes it very difficult for us, as public representatives, to fight for our constituents.
	Transparency is also important for how the franchise system develops. When privatisation was introduced, there was only one profit-making line in the UK and there are now many that turn a surplus. Effectively—and I know that the Minister disagrees with me slightly on the detail of this—fare income is transferred from one part of the country to another. Roughly £30 of the £74 standard fare ticket from Ipswich to London is paid in premium which is moved, effectively, to those parts of the country that need a subsidy. That is unfair on my constituents, especially those who are paid the same bad wages that some people in subsidised areas are paid. They rightly demand a social subsidy so that they can get their rail service for less than they would otherwise.
	If a lot of our fare income is being moved to other parts of the country, it makes it difficult for us to get the investment we need. We should have more transparency about how the premiums are moved so that we can achieve some sort of parity for investment.
	I turn now to a discussion of the east of England, and I know that the Minister has a constituency interest there and, therefore, a profound knowledge of the area. Only two regions of England outside London are net contributors to the UK Exchequer: the south-east and the east. Since the 19th century, the eastern region has suffered some of the worst levels of investment. Historically, there has been a poor level of investment in the main line from London to Norwich, with hand-me-down carriages and levels of service that other parts of the country have long forgotten about. The region has contributed to the UK economy in the past five or 10 years, but investment is needed for that contribution to continue. The region is not demanding new motorways or A roads, but investment is required for people to able to get from London, Ipswich and Norwich to the midlands. That would lead to growth that would make a significant contribution to the UK economy.
	We are profoundly grateful for the investment that has occurred in the past few years. It was promised for many years, but not delivered. We will soon have a direct line between Felixstowe and Nuneaton, the constituency of my hon. Friend the Member for Nuneaton (Mr Jones). Thereafter, I hope we will have a direct line from Nuneaton to Coventry. I hope—the Minister will speak on this later—that there will be a new bypass loop north of the Minister’s constituency of Chelmsford, which would release capacity and performance between
	London and Norwich. All of these plans, in addition to Ely North junction, have been long promised and long talked about. They are at last being delivered, and for that we are very grateful. However, we need new trains on the new track; not now, not immediately or in the next few years, but within the new franchise that will be set in 2016. We need the new trains that have been received in the rest of the country and have been denied to us. Whenever the rest of the country is finished with a new train, it is passed on to East Anglia. That is no longer good enough.

Simon Burns: indicated dissent.

Ben Gummer: Well, it has been true since the 19th century. I hope that at some point we will get the new trains that will release the economic potential in Ipswich and Norwich that has so long been denied to my constituents and their forefathers.
	We are making good progress. My hon. Friend the Member for Milton Keynes South (Iain Stewart) is now able to say that the railways are in a good place, something that would have been unutterable 10, 15, 20 or 30 years ago. We need investment to continue, we need to release the power of the private sector and we need to be able to continue the miracle of rail privatisation.

Kelvin Hopkins: I will not spend too much time on the public-private argument, because that would go on forever and we would probably never agree.
	I mentioned that the Catalyst report of some 10 years ago found that British Rail had the highest productivity of any rail system in Europe. That was not because it was performing ideally, but because there was so much underinvestment that it was working “miracles on a pittance”, in the words of Tom Winsor, who was the rail regulator some years ago. He went beyond that to say that BR handed the rail system over to the private sector in good order. There was desperate underinvestment, but it did its best in difficult circumstances.
	As a commuter of 44 years on Thameslink and its predecessors, I love railways. Their renaissance has been a wonderful thing and I want it to continue. I have always thought that railways would be the transport mode of the future, not the past. If one goes back 20 or 30 years, they were regarded with utter cynicism by the Department for Transport. A senior official was put on to the BR board, as was the custom in those days. He arrived at his first meeting and said that he had come to oversee the demise of the railways—that was the attitude. Everybody thought that the great freedom-loving individualists would go by car, not by this collectivist, socialist system called rail. Nevertheless, we have seen a renaissance in the investment and use of the railways. Indeed, just about the only way to guarantee to get to a place on time is to go by rail. I could not possibly drive to Parliament at peak times; it would be impossible. I remember that my father used to drive from the suburbs of London into Kensington every day, but people could do that 50 years ago. It would not be possible now. People have to go by public transport—or, specifically, by rail. Railways are wonderful things.

Kevan Jones: Does my hon. Friend agree that increasing congestion on the roads is one reason why rail usage has gone up, not the great privatisation, which is what the hon. Member for Ipswich (Ben Gummer) thinks is the reason?

Kelvin Hopkins: My hon. Friend is absolutely right. We have seen people travelling longer distances to work and growth in the economy, particularly in London and the south-east, leading to much more commuting from longer distances to take advantage of lower house prices further from London, and so on. The amount of travelling that people need to do has increased enormously. The only way they can do it is by rail. I speak as someone who is sometimes asked by people, “How long does it take you to drive to London?”, to which I say, “I don’t know and I’ve never done it”—why would I, from Luton to London every day? That is my view of rail. I have been a passionate supporter of railways for a long time.
	However, since privatisation we have seen a surge in costs, not just on the operating side, but on maintenance and track renewal. Time and again when Labour was in office, I raised with Transport Secretaries the fact that the costs of maintenance and track renewal had gone up by something like four or even five times since privatisation. The reason was largely to do with the move towards more contracting and away from direct works. That contracting involved lots of lawyers and layer upon layer of project management, all of which meant bureaucratic cost, which is still the situation now. Indeed, after some time maintenance was brought back in-house. The problem was that the bad habits established while it was contracted out continued and the same people who operated in the contracted-out version carried on doing the work in-house, so there was not much difference. We have to look back to how things operated in the days of BR, when they were done much more efficiently.
	Direct employment of engineers is crucial in that. Rather than having project managers running schemes, with layer after layer of project management, and engineers employed as consultants, we should have engineers directly employed by Network Rail and running schemes from the top, not being brought in as expensive consultants.

Iain Stewart: May I draw the hon. Gentleman’s attention to the example I gave of the electrification of the Paisley Canal line? It involved the train operating company, Network Rail and Babcock engineering, a private contractor that delivered the project considerably under budget and two years ahead of schedule.

Kelvin Hopkins: There are undoubtedly examples of good practice, but there are many, many examples of bad practice, involving cost overruns and things being done expensively.
	Having an engineer at the highest level in projects is crucial. Project managers cannot make judgments about technology in the way that an engineer can. We need track engineers, signal engineers and people with all those kinds of skills, which are gradually disappearing because we are not training enough in-house. In future, I hope there will be a move back towards direct employment of engineers. So that is where we are.
	There is also a need to invest in infrastructure. We are talking about “Rail 2020”, not longer-term investments in things such as HS2, which we debated only last week. That is all years away—it might even be parked in a siding, which I would not object to either, although that is another view. Obviously I welcome the electrification plans. That is tremendous, but other things could be done—and need to be done quickly and could be done inexpensively—to make major improvements. As I said last week, upgrading the east coast main line, for example, could make a tremendous difference, even simply by doubling the viaduct at Welwyn. At the moment, there are just two tracks over the Mimram. If there was another viaduct, there would be four tracks and the bottleneck would be overcome. That would cost something, but nothing like the billions we are talking about with HS2. If we had east-west flyovers at Peterborough and Newark, it would free up the track for fast operation.
	As I mentioned last week, a 1990 test run was undertaken by BR to see how a fast train could operate from King’s Cross to Edinburgh. Remarkably, the line was cleared for the test run and the train ran to Newcastle in two and a half hours, with a two-minute stop there, and then onward to Edinburgh in three and a half hours. That showed what could be done if the track were upgraded on a regular basis. Three and a half hours to Edinburgh is eight minutes faster than the time HS2 is now advertising. It is not heavily trafficked, and if we took the freight off the east coast main line, we could—with longer trains, more modern signalling and a bit more of an upgrade—get much more capacity on that line very cheaply. I should mention, of course, that King’s Cross could also serve Leeds in that way in an hour and a half. With a 140 mph operation—the sort of speed that is possible not throughout the line, but for much of it—this King’s Cross to Leeds service could bring more capacity.
	The problem with the west coast main line is essentially the London to Birmingham route. As I said last week, there is an easy way of overcoming the problem by upgrading the Paddington to Birmingham Snow Hill route through Banbury. A 125 mph operation on that line would be relatively easy, with longer trains, a bit of upgrading and more modern signalling. That could effectively double the capacity for getting to Birmingham, and it would not be difficult or expensive. Paddington will be on the Crossrail route. From the City, then, someone could travel Crossrail to Paddington and straight through to Birmingham Snow Hill in the centre of Birmingham, overcoming a major problem. The station proposed for HS2 is rather further away from the centre than Snow Hill is, so some of the advantage of that is lost. Going further north, there is a stretch of 10 miles or so with three-track working north of Rugby. If it were made four-track, it would overcome a bottleneck and increase capacity going through to the north-west. As I said, things could be done that are not expensive and they could be brought in quickly, so that by 2020 all these things could easily be in operation.
	Most important of all, we have to look at investment for freight. I have personally been heavily involved in a freight scheme idea—it is not a pecuniary interest, but a political interest—and I believe we need new freight infrastructure. If we could get all the freight off the existing main lines on to dedicated freight infrastructure,
	we could solve enormous problems. Freight and passengers do not mix well, as they have different operating speeds. Passenger trains tend to go faster and are more reliable, whereas freight goes on long, slow and heavy trains, which do not fit well with passengers.
	There is a scheme to overcome that problem—at least on the north-south line linking the main conurbations. I have proposed the GB Railfreight route, and last week I put in a submission on behalf of colleagues to Network Rail for its consultation on freight. The GB Railfreight route would be a dedicated line going all the way from the channel tunnel to Glasgow, linking all the main conurbations in Britain.
	The important thing about freight, of course, is that 80% of it goes by lorry and trailer, not by container, so we would need to have a freight route capable of taking lorries on trains. Without that, we will not see the big modal shift from road to rail that we need. This scheme proposes precisely that, taking the largest lorries on trains. This is happening all over the continent of Europe with dedicated routes. New tunnels are being built through the Alps that are capable of taking through the largest sized freight. If we could run trains directly from Rome to Birmingham or from Berlin to Glasgow without interruption by passenger trains on a dedicated freight route capable of taking lorries on trains, I think we would see a transformation of the links between our regions and the continent of Europe, which would also breathe new life into the regional economies that so many Members represent. That scheme is a realistic proposition. It could be built quickly and cheaply, and all it needs is a nod from the Government. I have met previous Secretaries of State and officials from the Department for Transport and put the case to them, and it is a realistic prospect that I hope will be taken seriously. It has the backing of supermarkets, hauliers and so on.
	One important point I wish to make to the Minister is that such a scheme would use existing track route, underutilised lines and old track bed. Only 14 miles would be new line, and nine of those would be in a tunnel. Two routes would have to be electrified to a sufficient gauge to take lorries on trains: Gospel Oak to Barking, and Wigston to Chesterfield in the midlands. If on those routes the gauge was raised to a sufficient level and able to take full-scale lorries on trains, the scheme would work. Those lines will be electrified—rightly so; we welcome that—but if they could be raised to a sufficient gauge to accommodate that sort of freight, it would be a tremendous advantage. If that is not done and the freight scheme goes ahead later, we will have to do the work all over again, which would be an expensive irrationality.
	That is what I suggest. The scheme would take up to 5 million lorry loads off our roads every year. It would take all the north-south traffic off the west coast main line, the east coast main line and the midlands main line, and breathe new life into the economies of Scotland, the north-east, the north-west and south Yorkshire. There could eventually be a link to south Wales and Birmingham, and of course to London and the south-east, and it would link directly to the continent of Europe.
	Trains currently take lorries from the continent through the channel tunnel, but they can get only as far as the terminal at Barking where they are lifted off. They cannot get past Barking because the gauge is not sufficient
	to accommodate them. In a sense, the first phase of the scheme is already operating, but we want Governments and Network Rail to grasp hold of the idea and build the freight line that we think will transform Britain’s transport infrastructure. I hope that what I have said is helpful to Ministers and of interest to fellow hon. Members.

Kevan Jones: I thank my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) for her contribution, and for the work she does as Chair of the Transport Committee not only on rail but on all transport matters. As we have heard, passenger numbers are growing and the amount of freight on our railways has increased, and it is important to bear that in mind when talking about the future structure of railways in the UK. The argument made by the hon. Member for Ipswich (Ben Gummer) that those increased numbers were somehow down to the fact that John Major got privatisation so right stretches his ideological point a little far. As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, in recent years the increase in car ownership and congestion mean that many journeys cannot be made by road within a sensible time, and—quite rightly—people are using the railways.
	An efficient and well structured rail system for the UK is not only important to provide the transport links we rely on for individual travel and freight; it is also vital for our economy, especially in regions such as the north-east of England. That is why investment in our railway system is so vital. We have heard a lot of talk over the past few weeks about the capital investment projects outlined by the Government, but over the next two years we will actually see a reduction in the transport budget of some £300 million. A lot of the investment projects that have been outlined are jam tomorrow, or even jam a very long way into the future. Capital investment in our railways now would not only improve the situation in the ways outlined by my hon. Friend the Member for Luton North, it would stimulate the economy. Such investment would not be wasted; it would boost the economy of the United Kingdom and it would certainly improve the economies of regions such as the north-east of England.
	We had a debate on High Speed 2 last week. When I opened the Daily Mail this morning, I found myself in a rather difficult position, because I found myself agreeing with Lord Mandelson. That has to be a first, although I was not sure that I could believe what I was reading. Some of the points he raised were perfectly legitimate, however. The investment in HS2 is going to be enormous and, I have to say, regions such as the north-east will see very little benefit, even when, in the longer term, the high-speed route reaches Newcastle or beyond.
	There has been a silly argument about high-speed rail being an alternative to regional air transport in this country. I do not agree with that; I believe that the two can compete alongside each other, as the hon. Member for Ipswich said earlier. For someone travelling from the north-east to Bristol, for example, flying is a better option than taking what is at the moment a long train journey. I do not think that the investment in high-speed rail will produce greatly reduced journey
	times to Birmingham and beyond. I also fear that it could sap scarce capital investment from the existing rail network.
	We have to thank the Victorians for many things, and our existing rail network is one of them. It was a good example of their forward thinking. I accept that, under nationalisation, a number of Governments starved the network of investment, and that that led to some of the problems that we now face. However, that should not take away from the achievements of British Rail, including the introduction of the high-speed InterCity 125 service. That was so far-sighted that the service is still running today.
	As my hon. Friend the Member for Luton North has said, we could achieve some quick and relatively inexpensive changes to the north-east main line for a fraction of the cost of HS2. Those changes would have a dramatic effect on journey times and, as he said, they would achieve a modal shift as we moved freight off the roads and on to the railways. Before we embark on the full investment in HS2, those proposals need to be looked at seriously. They are doable and relatively cheap, and they would benefit many regions of this country, not 20 or 30 years in the future but now.

Kelvin Hopkins: I agree with everything my hon. Friend has said—not just the compliments he has paid me but the earlier part of his speech, with which I strongly agreed. The outside estimate for the GB Freight Route scheme is £6 billion, which is a tiny fraction of what is being proposed for HS2.

Kevan Jones: My hon. Friend makes a very good point. We also need to consider the multiplier effect of such a scheme, and the economic benefits to regions such as the north-east. There would be benefits in reduced journey times, and in the increased amount of freight on the railways. The climate change cost would also be reduced as we got freight off the roads, and the scheme could create regional expansion in areas such as County Durham.

Guy Opperman: I am following the hon. Gentleman’s argument with interest, but would he not agree, given the funding for the northern hub, the improvements to northern rail services and the totemic importance of HS2, that there is now a strategic shift, supported by those on both Front Benches, in favour of high-speed rail coming to the north-east? That must surely be a very good thing.

Kevan Jones: I fear that we will have exactly what we experienced in the early days of the channel tunnel, when trains travelled at high speed through northern France and then came to a slow stop at the other end, crawling into Waterloo. The idea that someone would travel to Birmingham or Manchester by high-speed rail and then continue the journey on the current CrossCountry network is ridiculous.
	The hon. Gentleman, representing a north-east constituency as he does, will be well aware that travelling to Birmingham, for example, is very difficult at the best of times. Even if journeys to Birmingham and Manchester were speeded up marginally, travelling to the eventual destination could take a further two hours. If the hon. Gentleman has ever travelled from Durham to Manchester,
	he will know that it takes about two hours, and sometimes involves changing trains at York. As my hon. Friend the Member for Luton North has suggested, the investment that is being proposed could reduce those journey times now, at a fraction of the cost of HS2.
	I hope that I do not sound too much like the little boy who pointed out that the emperor had no clothes on, but I have seen a great many projects such as this, and it is clear to me that the Government have become starry-eyed about HS2. In the last Parliament, Lord Adonis became starry-eyed in the same way, saying that this was the big idea that would solve the problems of the United Kingdom’s railway network. I am sorry, but I do not agree.

Guy Opperman: Both the hon. Gentleman and I contributed to Lord Adonis’s review of the north-east for the North East local enterprise partnership. Consideration of HS2, the northern hub development and an increase in connectivity between the various regions of the north-east formed a pivotal part of that review. I respectfully suggest that the lessons that we discussed and apparently learnt at that time seem to have been forgotten by the hon. Gentleman, given the speech that he is delivering now.

Kevan Jones: The hon. Gentleman may have had the privilege of contributing to Lord Adonis’s report, but I was never even asked for my opinion. I think that many things in that report are complete nonsense, and that it has been given a status in the north-east far beyond its content. What my hon. Friend the Member for Luton North has proposed would increase connectivity in the north-east at a far lower cost than HS2, and would, I believe, be of more benefit to the north-east.
	It interests me greatly that the hon. Member for Hexham is now enthralled by Lord Adonis’s report and believes that it is the answer to the problems of the north-east’s economy. I am afraid that I do not share his view, and I think that if he talks to people in business and to his parliamentary colleagues, he will find that many of them do not share it either. The debate about the investment in HS2 needs to take place, and I hope that it is not too late for some of the decisions that have been made to be reconsidered.

Kelvin Hopkins: One assumes that the hon. Member for Hexham (Guy Opperman) would travel to Newcastle on HS2, and would then take a slower train from Newcastle to Hexham. In fact, in 1990 a train on a British Rail test run travelled to Newcastle in the same time that it would take on HS2.

Kevan Jones: Exactly—and if we are talking about the scarcity of capital, we should consider the upgrading of links to Hexham. In my constituency, some existing lines could be opened up. The Leamside line, for instance, could take freight off the main routes.
	Let me now say something about the east coast main line. My hon. Friend the Member for Blackley and Broughton (Graham Stringer), who is not in the Chamber at present, wondered why the Government were in such a rush to return to privatisation. As he said, the line is contributing to the Exchequer, and is performing well in terms of punctuality and the quality of the service that
	it provides. Investment in rolling stock is clearly needed. However, the staff have worked hard to ensure the success of the line since renationalisation. They should be given credit for that, and for the tremendous loyalty that they have generated among the travelling public.

Iain Stewart: May I draw the hon. Gentleman’s attention to one of the recommendations of Richard Brown’s review of the franchising system after the west coast main line issue? He said that
	“it is very important that the franchising programme is restarted as soon as possible.”
	I would suggest that that is a reason for bringing forward the franchising process for the east coast main line.

Kevan Jones: That may well be the case, but is it going to be good for the taxpayer? We currently have a very successful operator contributing to the taxpayer, so why automatically go down this route, unless there is an ideological reason of wanting to ensure that the operator moves from the public sector back into the private sector, which is clearly the position of the hon. Member for Ipswich (Ben Gummer)?

Iain Stewart: One of the other conclusions of the Brown review was that the pause in the franchising programme was having knock-on effects in the railway procurement industry, and that delay could interrupt the important investment in long-term projects. That is one of the reasons why Brown concluded that the franchising timetable should be restarted as soon as possible.

Kevan Jones: I am going to come on to the issue of franchising in a moment, but the hon. Gentleman’s point is based on the assumption that the Government would not invest in the rolling stock now for a nationalised company. The idea that the new rolling stock will be provided only by a private provider is not a good enough reason for saying that we should not at least examine the reasons for keeping the company in public ownership.
	This is not just about the rail network itself; it raises issues around rolling stock and guaranteeing jobs in this country in providing new rolling stock, including through new investment in the north-east by Hitachi, which is very welcome and is locating a new factory at Newton Aycliffe.
	How local people can influence the franchising process is a key issue. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) raised the important point of the transparency of the process, and there is a constituency issue that I have been campaigning on for a number of years now: the stretch of the east coast main line that goes through my North Durham constituency from Chester-le-Street into Newcastle. Chester-le-Street has now increasingly become a commuter town for Tyneside and Teesside. It takes less than 15 minutes to travel from Chester-le-Street into Newcastle, and if it was in south-east England it would therefore be seen as an obvious place to commute to work from. In the mornings and early evenings there is an hourly, and sometimes a half-hourly, service, but throughout the rest of the day the timetable
	is intermittent, and later in the evening when people want to travel into Newcastle for entertainment there is a limited service.
	I pay tribute to the campaign of the stationmaster at Chester-le-Street, Alex Nelson. He has been arguing for an hourly stopping service from Chester-le-Street to Newcastle. We have met Northern Rail to make the case for that, and the point it keeps making to us is that the franchising model puts an emphasis on inter-city routes, rather than stopping services. It is clear from the public meetings I have had about this issue over the past few years that there is huge interest in Chester-le-Street to ensure it gets an hourly service into Newcastle not only at peak times, but throughout the day and at weekends. That would serve to reduce the number of cars travelling to Newcastle and alleviate congestion. We need to think about how local people can have a voice in determining issues such as the train service from Chester-le-Street, which is not only important for local people, but which benefits the economy of Tyneside. A study has recently been undertaken on widening the western bypass, as we need to get the cars off that. One of the easiest ways of doing so is to invest in the likes of an hourly stopping service from Chester-le-Street.
	Finally, I wish to discuss the wider transport picture in the north-east. I congratulate the seven local authorities in the north-east which are coming together in a strategic partnership to examine economic development. Not only that, but one of their key objectives is to look at a joined-up transport policy. This debate is about rail, but we cannot look at that in isolation; we need to consider how it joins up to other public transport networks, be it the buses or the Metro system in Tyneside. It also needs to be as easy as possible for people to transfer from one mode of transport to another. One thing I would like the authorities to back is some kind of Oyster card, whereby people could travel using different modes of transport in the north-eastern region. That would make travel a lot easier, and the new authority may well be able to push forward with such things. The investment we need in our rail network is not only vital for the purpose of people travelling; it is vital to the future economic benefit of this country and certainly of regions such as the north-east.

Several hon. Members: rose—

Lindsay Hoyle: Order. Before I call the hon. Member for Edinburgh East (Sheila Gilmore), I remind hon. Members that at 6.25 pm the Front Benchers need to start their speeches.

Sheila Gilmore: In recent months, I have been spending a lot of time working on issues relating to the east coast main line and the proposal to re-privatise it. The Backbench Business Committee was good enough to grant a debate on that some two weeks ago, which gave many of us an opportunity to explain why we had severe concerns about what was happening. In a lot of these debates it is interesting to see how we reprise a lot of our own prejudices—we are probably all a bit guilty of that—and we heard repeated the old mantra about British Rail’s soggy sandwiches and drinks that were like coffee or tea. However, some of us can also recall some pretty good things about British Rail. As a student, I was able to send my luggage
	in advance, door to door. None of the privatised rail companies has, at least as yet, repeated that. When my children were going to university, it was difficult to send their luggage. No doubt a lot of people now drive their children there and back, but we did not do that. There are good and bad things here. If we, on both sides of this argument, constantly raise those issues without having a proper debate, we will not progress things much further.
	One advantage of the east coast line having been operated by Directly Operated Railways in the past few years is that we have been given something of a comparator. The Minister is fond of saying, “There is nothing really to compare. Every area and every franchise is different, so it is not a fair comparison.” Nevertheless, this arrangement has given us something that is perhaps as close as we are ever going to get to an ability to try out a comparison. It is a pity that the Government do not seem to want to allow it to continue so that we can see what is happening over a longer period.
	Obviously, today’s debate is about looking more widely at railway issues and where they are going to be in the next few years. The things that have exercised the Government and the Transport Committee are the McNulty report, the cost of Britain’s railways and McNulty’s stark conclusion that our railways cost 40% more to run than comparable networks in Europe, many of which are state-run. If we had still had a nationalised railway at the time of McNulty and it had been found to be 40% more expensive, there would have been a huge outcry from many people about how dreadful it was and how we must do something about it. In some ways, one could start to construct the argument that it is a sign of the failure of the entire process of franchising and privatisation over nearly 20 years that we are in this position. We were promised that the system would be innovative and cheaper but that just does not seem to have happened. We should be having some serious discussions about why.
	The Transport Committee has considered the problem and tried to analyse some of the reasons behind it. We have heard a number of suggestions about how we could achieve the efficiencies identified by McNulty. He considered staffing, closing ticket offices and cutting the number of train guards, but as the Transport Committee rightly said, safety issues must be considered, including people feeling safe when they travel. We do not want to compromise safety and we must ask what savings can be realised in such circumstances, particularly as McNulty was looking for substantial savings of £3.5 billion.
	McNulty also suggested closer working between Network Rail and individual train operating companies—what is now called alliancing in the language of transport. A key driver of increased cost since privatisation has been the fragmentation of the industry to try to create competition when it is inherently difficult to do so with the split between track and stations and the operation of trains. The difficulty with alliancing is that it will not—or probably cannot—be rolled out on routes with multiple operators. Network Rail therefore said that from that point of view it does not expect to save much money, so, on that basis, we must ask how it would actually work.
	McNulty also mentioned raising income from retail and we discussed that today. There have been changes in places like the new King’s Cross station and the new St
	Pancras station. Sometimes, one walks into a station nowadays and wonders whether one is in a station or a shopping centre. It can even be quite difficult to find out where the platforms are, and people get quite disoriented. Whether such an approach is feasible anywhere other than in the big mainline stations must be considered with some degree of caution. Much of people’s travelling life is spent in relatively small stations in small places and people want to get there, get on their train and go, rather than have a shopping experience. One reason it works for the airlines is that people are required to arrive at airports very early and have a lot of time on their hands. In my view, one of the advantages of rail travel is that passengers are not required to spend a lot of time waiting. That is not to say that the idea is not a good one, to some extent, but the notion that we can achieve huge income and therefore efficiencies through such an approach is doubtful.
	The Transport Committee states that if the efficiencies are not achieved, we must go back and consider the whole way in which the industry is structured to see whether that is the best way to make the railways work for us. If the McNulty proposals that the Government are working through do not achieve those savings, we will still have a serious problem ahead.
	It is good that we are here. Our predecessors 40 years ago would have been surprised to find that we are in the Chamber discussing the railways with such enthusiasm, as they thought they were becoming a rather niche interest. However, there is a question about whether we are in this position because of privatisation, as some speakers have suggested, or whether we have seen a change all over Europe in how people travel. The initial attractions of car transport have diminished, particularly in a crowded island such as Britain. It must be said that much of the investment that has gone in since privatisation and that is still going in is from the public sector. It is not coming from the private operators, regardless of what was promised, so we as taxpayers are subsidising the railways. Perhaps that is the right thing to do, but whether it is the right thing to do through privatisation, so that we are, in effect, subsidising the profits made—where they are made—is a completely different question. As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, we must not confuse correlation with causation.

Lilian Greenwood: I congratulate the Transport Select Committee on the “Rail 2020” report, which combines an informative overview of the rail industry with some acute analysis of the challenges it faces. It certainly provoked a thoughtful debate this afternoon, albeit not necessarily one that involved a high degree of consensus. I suspect that the challenges to franchising in particular have deepened since the report was published last year. If the Committee were to repeat its inquiry today, perhaps its conclusions would be even stronger.
	When the McNulty report was published in 2011, it was widely acknowledged that the rail industry was in need of reform. Privatisation had left us with a fragmented and opaque system—a system that incurred massive costs and offered little accountability for the money
	being spent. Contrary to what the architects of privatisation had promised, subsidy had increased in real terms since the mid-1990s—

Simon Burns: Under your Government.

Lilian Greenwood: And passengers faced some of the highest fares in Europe, as well as often bewildering pricing structures. The Minister says, “Under your Government” from a sedentary position, but that is precisely why we commissioned McNulty to look at how to achieve efficiencies.
	The Committee’s recommendations on financial transparency, fares and ticketing reform and devolution were welcome, but implementation has been delayed by a Department that seems to have been overtaken by problems of its own creation. In the past year, we have witnessed the collapse of the franchising system, which has cost the taxpayer at least £55 million. Those are the direct costs; that figure does not cover the fall in orders that is hurting the supply chain or the uncertainty that still hangs over the industry, nor does it reflect the damage that has been inflicted on the Government’s own efficiency plans—both points well highlighted by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman).
	The Government intend to find £3.5 billion of industry cost reductions by 2019. An annex to the “Rail 2020” report states that while
	“Some of the savings are already in Network Rail’s plans, most of the rest have to be secured by passenger train operators and their suppliers…via the next generation of franchises.”
	Does the Minister accept that analysis? If he does, what does he believe the cost to the taxpayer will be in deferred efficiencies, owing to the much extended delays to the franchising programme?
	Against that background, Ministers have taken the politically motivated decision to make the privatisation of East Coast their top priority. At the same time as they are agreeing lucrative extensions for private operators, at great cost to the taxpayer—for example, it was recently reported in the trade press that the c2c contract extension came in £17 million over budget—for ideological reasons the Government are disrupting the one stable part of the network. Since the last private operator walked away, East Coast has returned £640 million to the taxpayer and invested £40 million in the service; it makes the second highest contribution of any operator to the Treasury; and it has significantly improved passenger services.
	East Coast provides an interesting test of the Government’s commitment to openness. Despite Ministers’ stated intention to improve transparency, they are trying to have it both ways when it comes to East Coast. The Government cannot both laud the Office of Rail Regulation’s breakdown of the industry’s finances, as they did in the formal response to the “Rail 2020” report, and dismiss the figures that show East Coast to be most efficient operator. It is simply not credible.
	The Government have even invented a new measure to bolster the comparison between Virgin Trains’ and East Coast’s premium payments while conveniently ignoring subsidy going the other way. As the net payment figures show, East Coast comfortably paid more to the Treasury over the past three years, but Ministers have tried to give the opposite impression. It is not policy led by
	evidence—it is just the opposite—from a Government determined to push through privatisation, which will not benefit the railways or passengers.
	We have seen no progress on fares and ticketing either. The Government’s review was originally due to be published in May, but we are now told that it will be published at some point in the summer. The Minister will surely appreciate the irony when he next lectures East Coast on punctuality. I hope that the review will now bring forward serious proposals for reform, because at present passengers often find it difficult to secure the cheapest tickets, especially from automatic ticketing machines. The definition of peak and off-peak is not always obvious, and as a consequence some passengers find themselves with huge bills through no fault of their own.
	Passengers also rightly feel aggrieved when they have to use a replacement bus service but are not entitled to compensation, regardless of the inconvenience to their journey. Those are the sorts of issues that the fares and ticketing review should be looking at. The Transport Committee was right to call for so-called super-peak tickets to be ruled out. They would penalise those commuters who have no choice but to travel at peak times. I urge the Minister to go further than he had done previously and rule out granting train operating companies the right to redefine peak time periods. I also ask him to give the House a categorical assurance that operators will not be given additional powers to price commuters out of peak time periods.

Ben Gummer: There is a technical problem with the hon. Lady’s suggestion. Currently, with the Government setting peak times, we end up with the ridiculous situation that people leaving London to go to Ipswich, Norwich or Chelmsford in the morning are on empty trains and paying £74, but if they are going into London they are of course on packed trains and paying £74. The Government have set the peak time rules for many years, so the franchisee cannot make an elastic arrangement to encourage people to take the train when it is empty and discourage them when it is full. I suggest that that is in the commuter’s interests.

Lilian Greenwood: I suggest that the people who stand to suffer as a result of that are those who have no choice about when to travel. If people have a choice, they will not travel on peak trains. Those who have no choice will be stung by having to pay whatever price is asked.
	As the McNulty report put it, we have a fare structure that is complex, often appears illogical and is hard for the uninitiated, or even the initiated, to understand. The answer is not new, unreasonable super-peak fares. We fully support the development of smart ticketing schemes, a policy closely linked to the devolution agenda. Transport for London and Centro have demonstrated how strong local transport authorities can successfully introduce smart card schemes, making rail and other forms of public transport more convenient for everyday use. We believe that regional partnerships are best placed to introduce new schemes, drive forward integration with other modes of transport and decide their own priorities for developing local rail services.
	However, the pattern of dither and delay from the Department for Transport is also affecting the devolution agenda. Were it not for its extensions to the Northern
	Rail and TransPennine franchises, we could have seen an earlier decision on devolution, with the new settlement starting next year. We want to see an ambitious model of genuine devolution, learning from the success of continental models, that can be extended to other areas, including the west midlands.
	Unfortunately, we have already seen some reductions in local facilities. Although they are not as high profile as the cuts to passenger services we have seen in the past, we are concerned about ticket office closures, especially as some seem to be going ahead by stealth, using the McNulty review as cover. Last year, leaked e-mails from the Department for Transport revealed that Ministers had decided to approve closures and let train operating companies take the blame. That was an unacceptable way for closure decisions to be taken. I hope that Ministers will take note of the Campaign for Better Transport’s “Going Local” report, which drew together evidence from London Overground and Merseyrail. The evidence suggested that staffed stations and ticket offices led to increased passenger numbers, lower levels of fare evasion and increased passenger satisfaction.
	There are simply better ways to save money than closing ticket offices. Of course we need more efficient railways. Network Rail has delivered substantial efficiency savings since Labour ended the disaster that was Railtrack, and the rolling programme of electrification, which the last Government committed to, will help reduce operating costs.
	However, as McNulty helps to establish, although technology can bring about savings, the greatest challenge is fragmentation. Privatisation has left us a system with a 40% efficiency gap as measured against European comparators. Fragmentation has built in additional unnecessary costs at every level and we need a serious debate about how they can be addressed. On the Government’s response, it is too early to quantify properly the impact of alliancing and there are real concerns over the accountability of the Rail Delivery Group, which must not be used as an excuse to diminish ministerial responsibility.
	We must also be alive to the danger that through alliancing, non-dominant operators will be excluded from decision making. That is especially true in the case of freight operators—a danger acknowledged by the hon. Member for Milton Keynes South (Iain Stewart). If there are increased disputes over access rights, that will only generate a higher administrative burden for the regulator.
	To conclude, I should say that the Government have tied themselves so closely to the stalled franchising system that they have left the industry in stasis. Awards are being extended for up to four years at a massive cost to the taxpayer, on top of the £51 million net payment that the Government made to operators in the last financial year. The paralysis caused by the collapse of franchising has hit the supply chain’s order books, threatening jobs and skills. Ministers have made restoring franchising a point of political pride, even to the extent of privatising the successful east coast service, instead of seriously examining alternatives. That is what Labour is committed to doing, and why we are conducting a thorough review of the rail industry that is not hampered by ideological baggage.
	The Rail 2020 report made some useful recommendations for reform, but it also noted that there could be a case for structural changes. In the light of the franchising fiasco, we should seriously examine the alternatives, instead of remaining ideologically wedded to the failed models of the past.

Simon Burns: I begin by adding my congratulations to the Transport Committee on its important report, which comes up with a number of important and interesting recommendations. As the hon. Member for Liverpool, Riverside (Mrs Ellman), the Committee Chair, will know, the Government have responded in full to the recommendations, and on a number of issues we have considerable sympathy and agreement with them.
	Like the Select Committee’s, the Government’s vision is for a transport system that is an engine for economic growth—one that is environmentally sustainable and promotes quality of life in our communities. Rail offers commuters a safe and reliable route to work. It facilitates business and leisure travel, connects communities with their public services and workplaces and transports millions of tonnes of freight around the country, relieving congestion on our roads and bringing huge environmental benefits.
	It is easy for some to criticise our railways, but as the Transport Committee itself noted:
	“In many ways the railway has been a success in recent years.”
	We have made tremendous progress. As hon. Members, including my hon. Friend the Member for Milton Keynes South (Iain Stewart), have said, since privatisation passenger journeys have almost doubled—from 735 million in 1994-95, to more than 1.5 billion in 2012-13. That point was made by the hon. Member for Liverpool, Riverside in her introductory comments. There are some 4,000 more services a day on our railways than in the mid-1990s. Rail freight, which the hon. Lady also mentioned, has grown by over 60%, with traffic reaching over 21.5 billion net tonne km in 2012-13.
	With an ageing network built in Victorian times, coupled with underinvestment over a number of decades by successive Governments, operating today’s railway is a task of colossal proportions, but we are getting better at it. GB Railfreight has been ranked as the EU’s most improved rail network. Passenger satisfaction is up by about 10 percentage points in the past decade. Punctuality is up by about 12 percentage points, with just under 91% of trains arriving on time last year compared with just over 79% in 2002-03. That rather meets the point made by my hon. Friends the Members for Milton Keynes South and for Ipswich (Ben Gummer)—that the performance and the quality of service today is better than it was under British Rail, to which the hon. Member for Luton North (Kelvin Hopkins) is wedded, as we have now heard on at least two occasions in the past week. As other hon. Members have said, we are among the safest railways in the world.
	Just running today’s railways is not an option. We have the fastest growth rate of any of the major European railways so the Government have committed over £16 billion to running and expanding the network between 2014
	and 2019. We are providing capacity for an extra 140,000 commuter journeys into our major cities during the morning peak. Schemes such as Crossrail, Thameslink and the northern hub cross-Manchester link will have a transforming effect. They will increase capacity and connectivity and reduce journey times.
	[
	Interruption.
	]
	It is interesting that the hon. Member for North Durham (Mr Jones) is chuntering—I think that is the right word—from the Back Benches. He seems to be able to get away with it in a way that others cannot.

Mr Speaker: Order. The Minister will resume his seat. Let me be clear and explicit. There is a saying about pots and kettles. It is a point so obvious that I think it is within the comprehension of the Minister of State, who should now continue uninterrupted with his speech.

Simon Burns: Improved rail links to major ports and airports will support inward investment, trade and connectivity.
	Electrification will provide faster, more reliable services on the midland and great western main lines and elsewhere. We have confirmed funding for the completion of electrification of over 324 route miles and added a new requirement for a further 537 route miles. That means that we are funding electrification of 11% of all route miles in England and Wales. Our programme contrasts with the approach of the previous Administration, under whom fewer than 10 miles of track was electrified during their 13 years in power. By 2020, about three quarters of passenger miles travelled in England and Wales will be on electric trains, compared with just 58% today.
	We have provided a £300 million fund to improve passenger journey times. There is £200 million for stations across England, including £100 million to support accessibility. A further £200 million will build a better network for freight.

Kelvin Hopkins: I am delighted about the massive investment going into railways; I am sure we all support that. Does the Minister agree, however, that it is important to preserve the existing old corridors that could be used for rail travel in future? Will he undertake to make sure that the Woodhead tunnel in particular remains a possibility for rail travel in future?

Simon Burns: I have considerable sympathy with what the hon. Gentleman says. It is important that we consider opening new railway lines or reopening lines that have been removed but whose beds remain in place where there is demand and need for them and if the business case backs it up. Tunnels are an important and topical issue that has come across my desk and we are looking at it very carefully.

Iain Stewart: May I underline the importance of keeping old route lines open or free for potential reopening? Work on the western section of the east-west rail project has been very easy because the line is still there, but there are difficulties on the Bedford to Cambridge and East Anglia section because part of that track has been built on.

Simon Burns: My hon. Friend makes an extremely valid point. We have to learn from some of the mistakes of the past and what happened to the railways post-Beeching. I accept what my hon. Friend says.
	We are well on the way to delivering a new high-speed railway for Britain, bringing extra capacity, faster journeys and better services and changing our economic geography. I am sorry that the hon. Member for North Durham is not as enthusiastic about this exciting way of improving connectivity, journey times and increasing capacity. [Interruption.] The hon. Gentleman is chuntering, but I am surprised—

Mr Speaker: Order. Actually, the hon. Gentleman was not chuntering. There are many Members who do chunter in the House, in some cases extremely noisily, and an exemplar of that approach is the right hon. Gentleman. I suggest that it would be in his own best interests, of which he is not always the most appropriate guardian, that further references to chuntering by him might seem singularly inappropriate. Continue.

Simon Burns: Well, let’s move on.
	I was just saying that I am surprised and disappointed that the hon. Member for North Durham does not share the enthusiasm of his colleague the Leader of the Opposition for the new high-speed railway. I hope that he will be reassured, however, that rail is thriving. It makes a vital contribution to the UK’s economic competitiveness and the Government’s investment ensures that that will continue.
	The Government recognise, however, that we need to work to make rail even better. As recent surveys have shown, although passenger satisfaction is high on average across Great Britain, it can vary significantly across franchises, and although nine out of every 10 trains are running on time, with historically high levels of performance, punctuality is not yet as good as it should be, particularly on long-distance services, but also on London, south-east and regional services. Finally, the railway still costs more than it should.
	We fully understand the importance of achieving the McNulty savings, which have been mentioned by the hon. Member for Liverpool, Riverside and others. Our railways must become more efficient and financially sustainable. It is crucial that we ease the pressure of fares on hard-working families and reduce the burden on taxpayers, which is another issue of concern, not only to members of the Transport Committee, but to other hon. Members who have taken part in this debate.
	That was the challenge in the Government’s rail Command Paper: how to reduce the costs of running the railway while keeping the passengers at the heart of everything we do. We are making progress. Network Rail will have delivered 40% efficiencies over 2004-2014 and the regulator recently announced a new 20% target for 2019. Further efficiencies will be made through the programme of franchising competitions and the initiatives of the Rail Delivery Group. The key message is that aligning incentives between train operators and Network Rail is one of the most important reforms to drive down costs and bring passenger benefits.

Lilian Greenwood: Will the Minister set out how that has been set back by the delays to franchising, which he seems to be glossing over? Questions have been asked about whether his Department is up to the task.

Simon Burns: The hon. Lady is labouring the point a bit. It has been made quite clear—[Interruption.] If the
	hon. Member for Scunthorpe (Nic Dakin) keeps quiet and listens, he will get the answer. This matter obviously causes amusement in every part of the Chamber.

Mr Speaker: Order. The Minister of State is a slow learner, but he must try to grasp the point that it ill behoves a right hon. Gentleman who regularly shouts, hollers, chunters and accuses other people of all sorts of things from a sedentary position to make something of the fact that somebody else mutters from a sedentary position. I gently advise the Minister to raise his game and operate at the level of events. Minister of State, continue with the speech and the reading thereof.

Simon Burns: As I was saying in answer to the hon. Member for Nottingham South (Lilian Greenwood), the Secretary of State made it clear last September that what happened with regard to the west coast main line was unacceptable and apologised for it. Even more importantly, he set up the Brown inquiry and the Laidlaw inquiry. I will not rehearse what they did, but the Brown inquiry came up with recommendations to ensure that we learn from that mistake and that it never happens again. We have a new franchise timetable, in keeping with the recommendations of that report, to ensure that we minimise the opportunities for that mistake to happen again.

Kelvin Hopkins: Will the Minister give way?

Simon Burns: I must make progress, because it is almost time for me to finish.
	The Rail Delivery Group is showing how collaborative working across the rail industry can secure improvements in asset programme and supply chain management. We are working through our franchise programme to facilitate regional partnership working arrangements and alliances between train operators and Network Rail, as has been mentioned by a number of hon. Members.

Sheila Gilmore: Will the Minister give way?

Simon Burns: No, because I am running out of time.
	Those arrangements could involve joint working to improve performance and planning for engineering works or to reducing delays and disruption for passengers. Integrated control centres can deliver smoother and more efficient network operations.
	The Rail Delivery Group brings together Network Rail, freight operators and passenger train operators. It provides leadership for the industry, and offers a coherent and focused response to the investment and operational challenges laid down by the Government. Network Rail is enhancing its accountability with a new transparency scheme to publish more information and data that are of interest to the public.

Graham Stringer: Will the Minister give way?

Simon Burns: I will not.

Graham Stringer: There is plenty of time.

Simon Burns: There is not plenty of time. I am not speaking until 7 o’clock because the hon. Member for Liverpool, Riverside would like to make a brief winding-up speech.
	Network Rail has appointed a public interest director to articulate taxpayers’ views at the highest levels in the company.
	Responding to the Government’s rail Command Paper, the Transport Committee published its report on Rail 2020 in January this year. As I said earlier, we have welcomed that report and the Select Committee’s support for our strategy, which is focused on making the existing structures and responsibilities in rail work better. We are not throwing everything up in the air and starting again, given the cost and disruption that that would be likely to entail.
	We are confident that our strategy can bring rail to the cutting edge of efficiency by 2019. To do so, the industry must take advantage of new technologies by looking to introduce smart ticketing and making ticket machines easier to use. The hon. Member for Nottingham South asked when that will happen. I reaffirm that it will be during the summer. Passengers will continue to be able to get help and advice from a member of staff about buying a ticket when they can currently do so. Train operators must also look at driver-only operations for trains. This is already standard practice on 30% of existing franchise services, including many commuter services in London and Glasgow.
	Crucial to the debate about rail is the Department’s role in letting and managing franchises for passenger rail services. This was discussed at length by several hon. Members during the debate. The Government’s firm belief is that franchising gives us the best possible basis for doing what we want to do with rail. The most liberalised railways in Europe have seen the highest growth in the last 15 years, with the UK and Sweden first and second respectively.
	The Government are committed to ensuring that we continue to have private sector innovation and experience in our railways. As hon. Members will be aware, in March we announced a new rail franchising programme, covering every rail franchise for the next eight years. It builds on much of the authoritative work undertaken by Richard Brown, as I have said. Supporting our franchising relaunch, we have now published a new guide about how franchising competitions are run. This is information that we want to be generally available and accessible to all. It will give certainty to the market and to suppliers throughout the industry and support major investment in our rail network.
	To grow a railway that will support passengers and our economy, we need that railway to be financially sustainable. Our rail strategy aims to achieve that, while putting passengers at its heart.

Louise Ellman: I thank hon. Members for their varied contributions in this constructive debate. Underlying all the contributions was support for the continued expansion of the railway. Privatisation separated both ownership and operation of train and track, and it is ironic that the solution being put forward now to deal with some of the problems that rail services face is to enable them to work more closely together.
	I listened carefully to the Minister’s reply to the questions I put, but I have a couple of other points to put to him. In relation to franchises and securing passengers’
	interests, we need to know more about what weighting will be given to securing those interests when assessing the award of franchises in the future. I asked the Minister to say what the financial implications would be of the cumulative 26-year delay in awarding franchises, but I did not hear a response. I hope that we will be able to get one, as it has implications for the industry as well as for the Department. I am pleased to hear that the fares and ticketing review will be published shortly. I note that it will be “during the summer”: I hope that will be sooner rather than later.
	Those are all important issues and it is essential that they are resolved to enable the railway to continue to expand and grow. We need proper franchises that reflect value for money for passengers and the taxpayer, and we need to ensure that fares are fair and not unaffordable. We must not price people off the railway.
	I know that the Government will produce more information about how the franchise system will develop in the future, and we look forward to that. The Committee will continue to consider all these issues, which are all ongoing and extremely important. Strong leadership is required to resolve them, from both the industry and the Department. The aim of the Committee’s work in this area will be to produce a more effective and efficient rail service. Rail is already popular, but it can be more efficient and fares can be brought down—at least, the rate of fare increases can be stopped.
	I hope that this debate, and the range of views we have heard, will help Ministers to address those issues, and I hope that we will secure more effective leadership from both the Department and the industry.
	Question deferred (Standing Order No. 54).
	The Speaker put the deferred Questions (Standing Order No. 54).

Department of Health

Resolved,
	That, for the year ending with 31 March 2014, for expenditure by the Department of Health:
	(1) further resources, not exceeding £50,475,001,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,
	(2) further resources, not exceeding £2,414,054,000, be authorised for use for capital purposes as so set out, and
	(3) a further sum, not exceeding £50,292,107,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

Department for Transport

Resolved,
	That, for the year ending with 31 March 2014, for expenditure by the Department for Transport:
	(1) further resources, not exceeding £3,070,706,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,
	(2) further resources, not exceeding £4,648,442,000, be authorised for use for capital purposes as so set out, and
	(3) a further sum, not exceeding £6,414,882,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.
	The Speaker then put the Questions on the outstanding Estimates (Standing Order No. 55).

ESTIMATES 2013-14

Resolved,
	That, for the year ending with 31 March 2014:
	(1) further resources, not exceeding £192,766,307,000, be authorised for use for current purposes as set out in HC 1074, 1070, 1079 and 1082 of Session 2012-13, and in HC 322 and HC 396 of this Session,
	(2) further resources, not exceeding £19,622,161,000, be authorised for use for capital purposes as so set out, and
	(3) a further sum, not exceeding £187,933,974,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Greg Clarke.)
	Ordered, That a Bill be brought in upon the foregoing Resolutions relating to Estimates 2013-14;
	That the Chairman of Ways and Means, Mr Chancellor of the Exchequer, Danny Alexander, Sajid Javid, Mr David Gauke and Greg Clark bring in the Bill.

Supply and Appropriation (Main Estimates) Bill

Presentation and First Reading.
	Greg Clark accordingly presented a Bill to authorise the use of resources for the year ending with 31 March 2014; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2013.
	Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 86).

Thomas Docherty: On a point of order, Mr Speaker. This afternoon we saw bizarre scenes where the Secretary of State did not have information in front of him about the future of Territorial Army bases. You will recall that I inquired about the future of Dunfermline TA, which was listed for closure. The Secretary of State confirmed that that TA was closing and that they would have to travel to an adjoining community. I have, late today, received a letter from the Minister for the Armed Forces, the right hon. Member for South Leicestershire (Mr Robathan), saying that what will actually happen is that they will cross a road. Given that this has caused huge distress today in Dunfermline, is there anything you can do to encourage the Ministry of Defence to get its stories accurate and straight, and to encourage Ministers to come back to the House at the earliest opportunity to clear up this whole sorry mess?

Mr Speaker: The responsibility for clarity of statement rests with every Member of the House. Obviously, where a ministerial statement is concerned, one would hope that it would be both accurate and clear. It is not for me to require a Minister to return to the House on this specific matter. However, the hon. Gentleman, through his point of order, has drawn attention to the factual situation, which I rather imagine he will communicate externally. Whether he wishes to communicate with others, including those in the Ministry of Defence, in the hope that they will wish to communicate with organs of journalistic expression I know not, but the hon. Gentleman is doing his best to advance his case.

Thomas Docherty: Further to that point of order, Mr Speaker. You will also recall that the Secretary of State undertook to write to both you and me about the Kilmarnock confusion today. I have checked the letter board and my e-mails, and I have had no such communication. I do not know whether you have received any communication, but the Scottish media have been briefed on the situation. I am curious to know whether the Secretary of State bothered to contact you, as he undertook to do so today.

Mr Speaker: I have not been contacted by the Secretary of State in the course of the afternoon. What I would like to say to the hon. Gentleman is that I stand by the remarks that I made, and which I think were echoed by others in respect of the handling of this matter today. It was clearly very unsatisfactory. If the hon. Gentleman is in his place tomorrow at business questions, and if his senior and responsible position in the team does not preclude him from participation in business questions, he may find that there are words uttered that will assuage even his very considerably wounded feelings on this matter. I think we will leave it there for now.

Business without Debate

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Road Traffic

That the draft Road Safety (Financial Penalty Deposit) (Appropriate Amount) (Amendment) Order 2013, which was laid before this House on 5 June, be approved.—(Mr Syms.)
	Question agreed to.
	Motion made, and Question put forthwith (Standing Order No. 118(6)),

Probation

That the draft Offender Management Act 2007 (Commencement No. 6) Order 2013, which was laid before this House on 10 June, be approved.—(Mr Syms.)
	Question agreed to.

BUSINESS OF THE HOUSE

Ordered,
	That, at the sitting on Wednesday 10 July:
	(1) paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Edward Miliband as if the day were an Opposition Day; and proceedings on the Motion may continue for three hours and shall then lapse if not previously disposed of; and
	(2) notwithstanding the provisions of Standing Order No. 20 (Time for taking private business), the Private Business set down by the Chairman of Ways and Means shall be entered upon at any hour and may then be proceeded with, though opposed, for three hours, after which the Speaker shall interrupt the business. .—(Mr Syms.)

PETITION
	 — 
	Jamie Still Campaign

Greg Mulholland: Earlier today I accompanied the family of Jamie Still—Jamie’s mother Karen, father Mike, sister Rebecca and grandfather Peter—to present a 13,000-strong petition on behalf of the Jamie Still campaign. I want briefly to pay tribute to their courage and especially to the work of Jamie’s sister Rebecca, who has shown remarkable courage in the face of the tragic and unnecessary loss of her brother.
	The petition states:
	The Petition of a resident of the UK,
	Declares that the Petitioner believes that the sentences for drink driving need to be tougher in the UK; in one case the brother of Rebecca Still was knocked down and killed by a drunk driver whilst he was on the pavement with his friends; further that the Petitioner believes that the driver did not lose his licence until 8 months later and did not go to prison until 9 months later; further that the driver received 4 years in prison but may only serve 2 years. The Petitioner would like zero tolerance for drink drivers so that they lose their license earlier and so that sentences are longer.
	The Petitioner therefore requests that the House of Commons urges the Government to amend legislation so as to be tougher on drink driving.
	And the Petitioner remains, etc.
	[P001192]

BENEFITS AND FOOD BANKS (COUNTY DURHAM)

Motion made, and Question proposed, That this House do now adjourn.—(Mr Syms.)

Phil Wilson: I would like to start this debate with two quotations. The first is as follows:
	“Relief varied…theoretically graduated according to the recipient’s power of earning his own living. As usual, the deserving poor were crowded out by the idle and worthless.”
	The second quotation refers to
	“the shift-worker, leaving home in the dark hours of early morning, who looks up at the closed blinds of the next-door neighbour sleeping off a life on benefits”.
	What do they have in common? Both refer to the deserving and undeserving poor; both are divisive. They appeal to emotion and prejudice, but not reason. The worker starting the night shift will probably be having to do so because he is on a low income and needs the money, while the person asleep behind the blinds will be the millionaire, dreaming of how to spend his tax cut.
	Those two quotations are from over a century apart. The first is from “A History of the County of Durham”, published in 1907, and can be found on page 245 of volume II of the series. The second quotation is from the Chancellor’s 2012 Conservative party conference speech. In some quarters, times change but everything stays the same. The quotation from 1907 ends with these words:
	“some of the towns and more populous parts found it advisable to have workhouses.”
	As we approach the middle years of the second decade of the 21st century, we do not have workhouses, but we do have a growing network of food banks.
	I want to congratulate and thank all the volunteers who work in food banks, especially in County Durham, many of whom I have known for a long time and can proudly count among my friends. I wanted to hold this debate to raise what I believe to be a growing crisis in our communities. It is a hidden crisis, because the recipients of food parcels do not, in the main, want to talk about their needs. They are embarrassed and can be cowed by their experiences—they do not appear on “The Jeremy Kyle Show”. How can we be surprised that they feel that way, when their Government refer to them as shirkers and demonise their predicament, even though almost 20% of those who use food banks in County Durham are in work?
	I have no doubt that the Minister will say in his response that the number of people using food banks in 2005-06 stood, according to the Trussell Trust, at something like 2,800 and rose to 40,000 four years later. The Minister may well talk about it now, but he did not talk about it then. I do not know whether he will mention that by 2012-13, that figure had grown to a staggering 350,000—up from 128,000 the year before. This figure does not include independent food banks, of which there are a growing number. A report produced for Church Action on Poverty and Oxfam by Niall Cooper and Sarah Dumpleton is entitled “Walking the breadline”, and it puts the number at nearly 500,000.
	The Minister may also say that the previous Labour Government refused to allow Jobcentre Plus to refer people to the local food bank, and that this Government
	have reversed that decision. I will say two things on that. First, when Labour was in power there were only about 50 food banks—50 too many, in my book—but today there are more than 300, so there will be a better chance of finding a food bank today than back then, which is a sad reflection on 21st-century Britain. Secondly, I will take no lessons from the Conservative party about Labour’s record on poverty: we introduced the minimum wage and the Conservatives opposed it; and we introduced tax credits and Sure Start. Those are all things to be proud of, and they were all opposed by the Conservatives.
	This Government are referring people in need to food banks because there are more people in need and there are more food banks to refer them to. In 2011, the Trussell Trust had one food bank in the north-east, located in Durham—in the Labour years there were no food banks in the north-east of England—and in that year, food was distributed to 741 people. Today, there are 10 major centres in the north-east. In the previous financial year, Trussell food banks distributed crisis help to 10,500 people. In the first three months of this financial year, they have provided help to 7,100.
	Durham Christian Partnership runs the food banks in Durham. The main distribution centre is in Durham city. There are many more in the county now acting as satellite food banks to the main food bank in the city. There are three in my constituency: at St Alban church in Trimdon Grange, at Trimdon village hall and at St Clare’s church in Newton Aycliffe. Three more are to open in Deaf Hill, Fishburn, and Sedgefield in the coming months.

Jim Shannon: What the hon. Gentleman says about Durham is replicated across the whole of the United Kingdom; it is the same in my constituency. People who are perhaps seen to be well-off or middle class are also using the food banks, because they do not have enough wages. Does the hon. Gentleman feel that the initiative by the churches and the faith communities has been the real goer for making the food banks work? It is they who have driven it, along with the local government, and perhaps local government could do more alongside the faith communities to make it happen for more people.

Phil Wilson: That is a valid point, and we should pay tribute to the churches up and down the country that are now providing food to half a million of our fellow citizens in Northern Ireland, Scotland, Wales and England.
	I would also like to mention the growth of independent food banks. One is run by the Excel church in Newton Aycliffe—known as Excel Local—and it has fed over 1,000 people in the area over the past year or so. In September 2011, the Durham Christian Partnership distributed 42 kg of food, helping 18 people. The latest figures for May this year show that the network of 12 food banks in County Durham has fed 934 people, providing 300-plus meals a day. This figure is increasing month on month. In total, the partnership has distributed in the region of 70,000 kg of food.
	Lord Freud, the Work and Pensions Minister has made headlines today when he said that the demand for food banks
	“has nothing to do with benefits squeeze”.
	I rebut those comments by quoting from an e-mail I received from Peter MacLellan who runs the Durham Christian Partnership food bank network. He says:
	“from the distribution points and also from calls received in the office that the changes to crisis loans and the other welfare changes have a major impact. Looking at the reasons why people are referred to the food bank up to the end of March 2013 out of 6620 people 18% came because of benefit changes and 34% due benefit delays. For April and May together, of 1,800 fed 22% came because of benefit changes and 40% due to benefit delays. So combining benefit issues the percentage has grown from 52% to 62% which I would regard as a significant rise.”
	He goes on:
	“I am especially concerned that there seems to be an issue with delays in claim processing and I’m not sure whether this is a local issue or national one or how the benefit claim processing centres are performing against their targets.”
	Can the Minister say why there seems to be an issue with delays to benefits?

Kevan Jones: I congratulate my hon. Friend on securing this debate. Does he think it an absolute disgrace that in 2013 not only are people relying on food banks, but in County Durham children are turning up at school hungry?

Phil Wilson: My hon. Friend—a fellow Durham MP—and I both know what is happening in our schools now. Children are turning up hungry, and we know of cases where teachers have paid for food for the children out of their own pockets. That is a crucial issue in areas such as ours.
	Will the Minister tell the House whether there are problems with benefit claim processing centres hitting their targets? If there are not, why do data from food banks prove there is a problem? There seems to be a huge difference between what independent charities are saying and what the Government are saying. Other worrying statistics show that just under 20% of those using food banks are in work and use them because their income does not cover the cost of electricity, rent and food, and something has to give. More significantly, a third of recipients are children. Food banks now claim that demand is outstripping supply, and the welfare reforms have yet to be implemented.
	Durham county council estimates that 119,600 households in County Durham— just over half of all households in the county—will be affected by universal credit when it is introduced. The council also estimates that changes to benefits and tax credits will see each household lose £680 a year, and that £151 million will be taken out of the local economy. Around 8,500 people in so-called under-occupied properties will be affected by the bedroom tax. That is an insidious piece of legislation which, anecdotally, is starting to be seen as another reason why people are using food banks.

Tom Blenkinsop: In Tees Valley, which is partly covered by my hon. Friend’s constituency, we are aware that unemployment for 16 to 24-year-olds is above 32%, long-term claimants of jobseeker’s allowance have more than doubled since mid-2010, and Middlesbrough council estimates that 10,000 children are now living in poverty. We also know today from ITV news in the north-east that £500,000 in rent arrears has not been paid due to
	the bedroom tax. Does my hon. Friend think that those four factors are contributing to the rising use of food banks?

Phil Wilson: Of course they are. Some people say it is an issue of supply and that because there are more food banks, more people are using them, but there is definitely demand out there. The statistics being quoted have massive consequences. No one is denying that welfare provision needs reform, but whatever any Government do in that regard, they must be prepared to face the consequences. When the welfare bill is increased by £20 billion, it is obvious that the reforms are not working. The increase in the number of food banks proves that the holes in the safety net are getting bigger.
	The key issue for people using food banks seems to be the delay in the receipt of benefits. Yesterday, in the other place Lord Freud said:
	“The Trussell Trust has said that one reason why people have come to it is benefit delays. I checked through the figures and in the period of that increase the number of delays that we had had reduced.”—[Official Report, House of Lords, 2 July 2013; Vol. 746, c. 1072.]
	Whoever we talk to in the food bank movement, they say that delays to benefits are the main reason people are referred to their centres. Surely it is not for food banks to be the stop-gap because the system is not working. Will the Minister say what his Department is doing to resolve that issue?
	What kind of people attend food banks? They include the mother who lost her job 16 months ago and is distressed that her nine-year-old child has not eaten fresh fruit or vegetables for most of that period. Another young mother did not have any food in the house and was worried about how she would feed her children when they returned home from school that day. There were many more examples from all over Durham and indeed the UK—all harrowing and all tragic.
	Olivier De Schutter, the UN special rapporteur on the right to food stated in an article in The Guardian on 27 February:
	“Food banks should not be seen as a “normal” part of national safety nets…Food banks depend on donations, and they are often run by volunteers: they are charity-based, not rights-based, and they should not be seen as a substitute for the robust social safety nets to which each individual has a right.”
	I agree with him. I also agree with him when he says that although society might not have completely broken down because of the significant increase in the number of food banks, it is fair to say that the increase reveals where society is broken. As I have said, the safety net might be there, but the holes in it are getting bigger, allowing more people to fall through.
	In the other place yesterday, in reply to a question from Baroness Howarth of Breckland about the monitoring of food banks, Lord Freud said:
	“It is not the job of the DWP to monitor this provision, which is done on a charitable basis.”—[Official Report, House of Lords, 2 July 2013; Vol. 746, c. 1073.]
	I would respectfully say to the Minister that, as there are now 500,000 of our fellow citizens using food banks, I believe the time has come to monitor food bank usage. The increase could be down to supply, but it is certainly down to demand. Why is it that the three main reasons
	for people using food banks are delay in benefit receipt, benefit changes and low incomes? Domestic violence and homelessness are other reasons for usage. Surely a responsible Government would start revising their approach to welfare reform by using the data acquired from food banks to help to close the holes in the welfare safety net that are so obviously opening up.
	The Government state that one reason for the increase in the number of food banks is that Jobcentre Plus now refers people on to them. However, the House of Commons Library standard note on food banks and food poverty states, on page 13:
	“While increasing awareness of the existence of food banks may well be a factor in explaining recent growth in usage...the role of Jobcentre Plus in this regard is difficult to quantify since it does not collate statistics on food bank referrals.”
	In addition, referrals from Jobcentre Plus did not start until September 2011, by which time the number of people being fed by food banks was increasing from about 60,000 in the previous year to 128,000 by the end of 2011.
	Perhaps it would be in the Minister’s own interest to start collecting data; it would certainly be in the interest of those being fed by food banks if the Government were to look at what we can do to close the holes in the safety net. It is not only me saying that; the UN special rapporteur on the right to food believes so too. He said in the same article that I quoted earlier:
	“The lesson of the current upsurge in soup kitchens and food pantries is not that we need more food banks or fewer food banks, it is everything else—the social safety net above and around it—that needs to change, and the direction of that change can be oriented by the lessons that food banks, and the stories of their clientele, teach us.”
	The Government must not be allowed to renege on their responsibilities because charities are left to pick up the pieces. My request of the Minister is to learn from the food bank phenomenon, because it is not going to go away. It is only going to get bigger. If we are not careful, the social safety net built up over the decades will be dismantled and put away somewhere as a memory.
	I would also like to hear the Minister’s response to the call from Church Action on Poverty and Oxfam in their report “Walking the breadline” for the Government to set up an inquiry by the House of Commons Work and Pensions Select Committee into any relationship between benefit changes and food poverty. Would the Minister welcome such an inquiry? The report also called for regular publication by the DWP of data on benefit delays, errors and sanctions, for monitoring by the DWP of the effect of universal credit on food poverty, and for the recording and monitoring of food bank referrals made by Government agencies. I know that the Minister will deny this, but I believe that, if we are not careful, food banks will become a part of the welfare system—and that it will happen by default.
	Finally, I would like to thank the volunteers who make the food bank network work. They include Peter MacLellan, who co-ordinates the food banks in County Durham for the Durham Christian Partnership, and Ernie Temple who runs the food bank at St Clare’s church in Newton Aycliffe. I also want to thank Rachael Mawston and her team at Excel Local for all the hard work they put into running their food bank, and Councillor Peter Brookes, Michael King and Rev. Michael Gobbett of Sedgefield Churches Together, who run the food
	banks in the Trimdons and who are looking to expand into Sedgefield, Fishburn and Deaf Hill. I am sure that the Minister will applaud their hard work. There will always be those who fall through the safety net, however well constructed it might be, and we need people like them to prevent those most in need from falling through the net on to the ground. I believe that those people now have their hands full.

Mark Hoban: I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing the debate.
	I believe that, in the long run, the process of welfare reform on which we have embarked will enable more people in County Durham to find work, and will help those who are in work but on low incomes. The hon. Gentleman implied that Durham county council was fearful of universal credit, but I believe that the council should welcome the opportunity that it presents. Our intervention and support will encourage and help people to move up the earnings scale.

Kevan Jones: What about jobs?

Mark Hoban: I shall return to the subject of jobs shortly.
	My Department has been asked a number of questions about food banks in recent weeks, and this evening I have listened to what the hon. Member for Sedgefield has said about constituents of his who make use of them. I hope he will be reassured to know that we do not think that they form part of the welfare system. We do not measure their use, but we do “signpost” people to them, just as we might direct people to any charity that provides help and support. I should add, however, that we know from the Trussell Trust’s own figures that only 2% of people say that they were directed to a food bank by Jobcentre Plus.
	Under the current benefits system, it is not obvious to people that working will make them better off. The problem lies not with claimants, but with the system. Our reforms will, over time, deliver dynamic benefits as more people are encouraged to work and to increase their earnings. As all the evidence shows, work is the best route out of poverty for individuals and households. Universal credit is a seamless “in and out of work” benefit which will make it easier for people to move into work. Because people should know that work pays and earning more pays more, incentives are built into the system to encourage them to move from low incomes to higher ones. Over the next few months, we shall be identifying ways in which we can help people to increase their earnings and reduce their dependence on the welfare state, thus giving them more dignity and boosting their self-esteem.
	Universal credit will make 3 million households better off and will lift a quarter of a million children out of poverty, because we are putting more money into the system. The hon. Gentleman asked about family poverty. Statistics relating to households with below-average incomes show that the number of children in workless poor families has fallen by 100,000 over the past year.
	As well as making work pay, however, we must ensure that benefit payments are directed towards those who need them most, that they provide a fair deal for the taxpayer, and that they restore fiscal responsibility to our finances. The reforms that we have introduced are already helping more people to move into work. In the last year alone, there has been a 6% fall in the number of claimants of jobseeker’s allowance in County Durham, and the figure for young people is even better: 14% fewer are claiming the allowance.
	The Work programme in County Durham is helping people to find sustained employment. Of the 12,000 who have joined the programme in County Durham, 1,200 have secured jobs, and four out of five of those have remained in work for longer than six months. That demonstrates—here I address the point made by the hon. Member for North Durham (Mr Jones)—that there are jobs there, and that people are staying in employment. We are seeing a break in the pattern of worklessness that persisted under the last Government, who wrote off many of those people.
	Let me give an example of what is happening under the Work programme. Wesley McGinn had applied for more than 1,000 jobs since leaving school. His provider worked with him to improve his interview skills and his CV, and helped him to search for jobs that matched his skills and aspirations. Now he is working for Care UK. Wesley has said:
	“I'm so glad that Ingeus helped me succeed...I have a good job, I feel I am making a real difference, and I can now pay my own way in life.”
	The system that we inherited from the last Government simply wrote people off when they were unfit for work, but in the last two years the number of people in County Durham receiving employment and support allowance and incapacity benefit has fallen by more than 3,000. Some of those people had been receiving incapacity benefit for more than five years. Now, either those people are in work or we are actively helping them to find work rather than writing them off and leaving them stuck on a life of benefits. We are beginning to see real change as a consequence of our reforms.

Kevan Jones: The Minister is from County Durham, and presumably knows the area well. I must tell him, however, that when people in my constituency obtain work, it is low-paid work involving short-term contracts. Those people cannot secure the long-term security that they need. For instance, they cannot gain access to credit. The proposal in the autumn statement not to pay jobseeker’s allowance for the first seven days of unemployment will lead to poverty, and people in that position have no savings to fall back on.

Mark Hoban: People who lose their jobs are paid in arrears and the money we are saving by increasing the period from three days to seven is going to be used to provide more support to get more people into work and to get them into work quicker.
	The benefit cap is often cited as a cause for referrals. We have decided to cap the total amount people can receive in benefits, and we will restore the incentive for them to move back into work. That is very important. We are working with Jobcentre Plus and local authorities to get people affected by the benefit cap into employment. We have given more money to councils through
	discretionary housing payments. In County Durham, only 200 households have been affected by the benefit cap, but we will work with those families to get them into employment.
	Crisis loans were mentioned, so let me say a bit about the reform of the discretionary social fund and support for short-term financial need. From 1 April this year, locally based provision of crisis loans is being delivered by local authorities in England and the devolved Administrations in Scotland and Wales, because local authorities are best placed to ensure help is targeted at those most in need. Durham county council has delivered support through HAND—Help and Advice Network Durham.
	Crisis support is provided in two forms. The first is settlement grants, where the applicant must have applied for a budgeting loan or advance from DWP if they are eligible to do so and have been declined. This aims to help people to remain in the community or move back into the community after a period in supported or unsettled accommodation. Awards are only available for items such as beds, bedding, furniture, white goods and kitchen equipment. The second is daily living expenses, to help to meet immediate short-term needs for goods or services that arise because of a disaster or unforeseen circumstances. Awards are only available for food, baby consumables, clothing, heating and travel, and for a maximum of seven days’ support. At a meeting last week County Durham local authority confirmed it was receiving about 50 to 60 applications a week, much less than the 250 to 300 per week it had anticipated. National provision is also available in the form of advances of benefit delivered by DWP for those awaiting first payment of benefit.
	Provision is therefore available for those who have had a delay. The hon. Member for Sedgefield might want to ask Durham county council why it thinks it is getting far fewer applications for support than it expected.

Phil Wilson: I am still waiting for the Minister to get to the main point of my comments. What he is saying is all very well, but there are still half a million people using food banks for three main reasons, and other reasons as well. Are the Government going to do any analysis? Are they going to look at why people are using food banks, to see whether there is any way they can close the holes in the safety net that people are falling through? We should continue to reform welfare, so it is the state that is doing this, not charities.

Mark Hoban: We are making reforms to welfare. The hon. Gentleman raised the issue of people on low incomes using food banks, and I am saying that we are introducing universal credit, which will support people
	on low incomes and increase their earnings. The Department for Environment, Food and Rural Affairs is doing a review of food aid. That is in the public domain and it will be reporting shortly.
	The hon. Gentleman raised the issue of benefit delays. The Trussell Trust has said that benefit delays are accounting for an increase in referrals to food banks, from 18.6% to 32.8% over the last year. However, our figures show that since April 2010 we have speeded up our processing of benefit claims by almost 5%. It is therefore hard to square the argument put by the Trussell Trust and the hon. Gentleman with what is happening in benefit centres.
	The hon. Gentleman asked about what is happening locally in benefit centres. In the Sunderland benefit centre, there has been a delay in processing jobseeker’s allowance claims. It is below the national average, but he will be reassured to know that it is back on an upward trajectory, so we are clearing work faster. The national target is 90%, and we hit that. In the year to date, we have hit 79.5% in Sunderland, with the figure for May being 81.4%, so we are improving.
	On employment and support allowance clearance rates, hon. Members will be pleased to know that in the Sunderland benefits centre, which covers County Durham, we exceed the national target of 85%. [Interruption.] Nationally, the argument the Trussell Trust is making is that the situation is down to benefit delay, but the point I am making is that we have speeded up the processing of benefits, so there is a mismatch. There has been an issue to address in the Sunderland benefits centre, but that has been tackled in respect of jobseeker’s allowance. In the north-east, the Sunderland benefits centre is processing claims faster than the national target, so there is a disconnect at a local level between what is being said by the Trussell Trust and others, and what the statistics show. We publish the figures for processing times and for sanctions, so that hon. Members can see them.
	In conclusion, we are seeing a process of benefit reform that is helping the north-east; it is getting people off benefit and into work. We see that in the Work programme, in the falling levels of incapacity benefit claims and in what is happening with JSA claims. We are trying to tackle a processing backlog in County Durham, but what we are seeing generally is that we are processing benefits far faster than we were in April 2010, and Labour Members should welcome that. Our reforms are the long-term solution to the welfare issue, as they ensure that we give people the dignity and self-esteem that comes from being in employment.
	House adjourned without Question put (Standing Order No. 9(7)).